I call the Minister for Agriculture, Food and the Marine, Deputy Creed, who has recovered from his long hours of negotiations, to make his opening remarks.
Beef Sector: Statements
I thank the Ceann Comhairle. I share the serious concerns about the ongoing difficulties facing the beef sector and understand the frustration which has driven some farmers to engage in prolonged picketing of beef factories. Last weekend, I facilitated lengthy negotiations involving beef stakeholders to try to find a resolution to the current dispute. All parties agreed that it was crucial to find a means of getting the sector fully operational again and protecting the livelihoods involved, including both beef farmers and factory workers, whose jobs are at risk. The talks last weekend culminated in an agreement between the meat industry and seven farming organisations and representatives, all of whom undertook to support the agreement on the ground and recommend those on the protests to step back from their protest in response to this negotiated agreement.
The agreement is a two-strand approach aimed at providing immediate financial benefits direct to beef farmers as well as addressing longer-term structural issues. A means to implement and measure progress on these measures was also set out and agreed. As part of the deal, beef producers will benefit from an immediate increase in a range of bonuses, as follows: an increase of 66% in the current in-spec bonus for steers and heifers from 12 cent per kilogram to 20 cent per kilogram; the introduction of a new bonus of 8 cent per kilogram for steers and heifers aged between 30 to 36 months, which meet all non-age related existing in-spec criteria, and which up to now have not received any bonus; the introduction of a new in-spec bonus of 12 cent per kilogram for steers and heifers under 30 months in the categories of grade O- and fat score 4+, which currently do not qualify for any bonus; and the in-spec 70-day residency requirement will be reduced to 60 days on the last farm.
These measures offer an immediate financial benefit for beef farmers. They both increase the level of bonus being paid and increase significantly the number of animals which are eligible for a bonus. The cumulative effect is that over 70% of all steer and heifers slaughtered will now be eligible for a bonus payment on top of the base price paid.
A beef market task force is being established immediately to provide leadership to develop a sustainable pathway for the future of the beef sector in terms of economic, environmental and social sustainability. I will appoint an independent chair to lead the task force. Its membership will comprise officials from the Department of Agriculture, Food and the Marine and relevant State agencies and nominees from farm organisations and the meat industry. The task force will provide a robust implementation structure for commitments entered into in the agreement, with timelines and stakeholder engagement. Furthermore, it will offer a suitable platform for strategic engagement with key stakeholders, including retailers and regulatory authorities. Other key immediate actions include the development by Bord Bia of a beef market price index model and a scientific review of the quality payment grid by Teagasc.
The second strand of the agreement sets out strategic measures which seek to address structural imbalances in the sector. These measures will provide clear information and bring greater transparency to the sector with a view to ensuring sustainability of the sector into the future. A number of actions in the area of market transparency, beef promotion and strengthening the position of the farmer in the supply chain were agreed upon. The agreed measures set a course towards greater clarity for all stakeholders involved in the beef supply chain, primarily farmers. The agreement includes commitments on an independent review of market and customer requirements, specifically in relation to the four in-spec bonus criteria currently in operation in the Irish beef sector; an independent examination of the price composition of the total value of the animal, including the fifth quarter, along the supply chain, the results of which will inform future actions, as necessary, and on which the beef industry will co-operate in providing data; and initiatives on improving information on carcass classification. There are also commitments with regard to more detailed price reporting, more reporting on carcass classification and on the transposition of the EU directive on unfair trading practices.
I do not intend to read out the agreement in full. The full details are available on my Department’s website. However, I am satisfied that it contains the best balance of immediate financial benefits for beef farmers and a series of more medium-term strategic actions.
In terms of other supports to the beef sector, I was pleased to be able to re-extend the application period for the beef exceptional aid measure, BEAM. On 16 September, I announced the extension of the application period for the BEAM until 5 p.m. on Friday, 20 September. I was also pleased to announce that Department staff would be available to assist farmers in making their application at the Department's tent at the National Ploughing Championships this week in Fenagh, County Carlow. I encourage anyone who is eligible to apply to avail of this final opportunity to apply for the scheme. Any potential applicants who are unsure of the benefits or details of applying should visit the Department's tent at the National Ploughing Championships where a dedicated team will be on site each day to answer any queries potential applicants may have and assist in submitting their applications.
It is very important to note the recognition, for the first time, of a beef producer organisation in Ireland on Wednesday, 11 September last. Producer organisations are an important part of the toolkit in building resilience in the sector by strengthening the position of the primary producer in the supply chain. Department officials have engaged extensively with potential groups since the inception of the measure in 2016 and one of the commitments from the Backweston agreement in August was that officials would engage to the fullest extent possible to assist with the establishment of beef producer organisations. This commitment was clearly demonstrated though the engagement with the established group, which has publicly acknowledged the level of support it has received from Department officials in this regard. Furthermore, the establishment of the group is an important and timely signal to farmers that they can collectively do business in a way that enables them to have increased bargaining power, as well as helping them to increase their economic and environmental efficiency through collaboration with the potential for enhanced knowledge-sharing and economies of scale.
Funding providing support for the establishment of beef producer organisations is available under the current rural development programme. This funding is available to support the engagement of Department approved facilitators to assist with the application process for recognition of producer organisations. Funding is available for each group, up to a total of €3,000. The Department is exploring the role producer organisations should play under the next Common Agricultural Policy, CAP, and how best to facilitate this. Producer organisations not only have the potential to improve the position of farmers in the supply chain but also to provide strong relationships between the elements of the supply chain to the benefit of all.
I will share the remainder of my time with my colleague, the Minister of State, Deputy Doyle. I will conclude by noting that collaboration and dialogue are the only way out of the current situation and the only way to secure the future of the beef sector. The entry into force of the agreement is contingent on the cessation of all protests and blockades. All parties to the agreement took responsibility for ensuring that this would happen by recommending the agreement to those they represent. The current situation is doing immeasurable damage to the sector and its reputation in our overseas markets, which account for 90% of all the beef we produce. The future of the beef sector is now in the balance and I appeal to all those still protesting to step back for the sake of their fellow farmers.
I welcome the opportunity to speak on this very topical and important issue. As a beef and suckler farmer, I recognise and appreciate the value the beef sector plays in rural Ireland, the role it plays in many communities and its value to our agrifood exports and reputation as clean, green and sustainable food producers.
It was inevitable that we would reach this point. Over the years, we have seen a progression from a point where farmers received most of their income from the marketplace to a point where every time there was a crisis, Governments responded to requests for further aid and support. This was accepted but at some point it had come to an end. We have moved to the current position.
I commend the Minister, Department officials and the various other participants in the process on their efforts and willingness to engage with each other in recent weeks. They tried to come to an agreement and persuade two polarised sides to move a little bit and take a leap of faith. This has not been easy and challenges remain but I believe these can be overcome.
We must first realise what has been achieved. The people who are still protesting do not realise what they have achieved by bringing this issue to the fore and concentrating minds, particularly in the meat processing industry, which, whether real or imagined, has taken the primary producer for granted.
In a world with a growing population in which food production will become more important but seems to be taken for granted, it is ironic that Ireland, a country that can produce food as efficiently and sustainably as any other country and better than most countries, is coming under pressure from wider society and other sectors to curtail food production. That is nonsensical. I am a primary producer and it is a basic requirement that primary producers and the generations of producers that will follow feel that a viable livelihood and good quality of life is available to them. There is a quality of life but one cannot live on air. We have to ensure that the primary producer is recognised. The object of the exercise is to ensure that all concerned feel they have a fair and equitable return from and reward for their efforts. The issue has been the breakdown in trust and the adversarial attitude and relationship that have developed over the years. The talks have achieved a lot and I do not believe we will ever go back to a point where we have a cloak and dagger approach.
As to what has been established by way of agreements, I accept that the base price remains an issue. However, the structure of the quality and bonus payment system over and above base is something to be very much welcomed.
The talks have achieved a great amount. I do not believe that we will ever go back to the point where we have this cloak and dagger approach with what has been established by way of agreements. I accept that the base price remains an issue with the structure of the quality and bonus payment system over and above base is something I very much welcome.
In other words, there is €25 million, or thereabouts, of new money in the system as matters stand as a result of that base price. Some 70% of all animals processed today will now qualify for a bonus. That is a positive.
That is debatable.
I do not plan to respond to everything the Deputy says, no more than I did on the previous occasion. I will have my say and will not be interrupted by him.
It is easy to work with no base prices.
I probably understand more about it than the Deputy in any event.
We are establishing a task force that will oversee the implementation process and develop transparency. We will have an index developed, a review of the grid, what exactly the customer wants and that everybody will understand it. Most importantly, when we get to the point where we understand the overall pricing structure of the animal, we will know what is sold where, how much is the return and what is the overall margin so that primary producers can eventually feel they are getting a fair return, which is not too much to ask. However, we need to make a leap of faith and we need some cordial dialogue among the people who are on the picket lines, the plants being picketed and the major processors. We can get over this but the Members, as policymakers, can continue to respond.
We have put in place numerous measures built on driving farm efficiency, be it the beef data and genomics programme, BDGP, or the beef efficiency programme. We have established environmental measures and targeted agricultural modernisation schemes, TAMS, for farm safety. We have brought in the exceptional aid package because of the market distortion. They are all fine in so far as what they achieve. Perhaps we need to consider moving in the direction of sustainable energy production, having solar panels on roofs and that type of thing in the future. However, we must get to the point where we move forward from this process in which the Minister, his team and the seven farm organisations engaged last weekend. The is the end of phase 1, not the end of the process. We are beginning phase 2 and we have an opportunity to embrace the structure that has been established to allow what has been achieved a chance to work. If it does not, I do not know what the answer is but I shudder to think of what will be the impact. In saying that, I am not placing the blame on anybody but that is the crux of the matter.
We need to take a step back. Ultimately, we want primary producers to have a fair standard of living, a fair reward for their work. We want them to be able to understand that is what they are getting through the task force, the index, and the grid so that we can plan for the future. Otherwise, we will see an inevitable change in the agricultural sector structure away from primary beef production to secondary beef production and arable production of whatever kind, but it will not be the same.
The beef industry is vital. We face the double-whammy challenge of Brexit. We have engaged with people. In fairness to everybody involved, they stood back to allow the Chinese inspections take place. We faced that because of the outbreak of African flu in China and we sought to capitalise on that market which we worked to develop for many years. We have engaged in the slow, laborious process of the building of trust. We might be on the cusp of something and the last thing we need to do is to curtail our ability to supply that market because of something that is happening at the moment. I appeal to everybody, the processors and the people who are still on picket lines outside the plants to engage to see if a solution can be found in order to allow what has been achieved, which we should not underestimate, to be developed. Let us give it a chance.
I call Deputy McConalogue, who is sharing time with a number of other Members, including Deputies Cahill and Brendan Smith .
I welcome the opportunity to speak on this issue. It is unfortunate that the Dáil was not in session in recent weeks and that this is our first opportunity, but nonetheless a welcome one, to discuss it. Fianna Fáil will table a Private Members’ motion on this matter tomorrow. It is essential that what has happened since the protests began on 28 July must be seen as a watershed with regard to the position of farmers and the respect they get for the work they carry out. Farmers have been trampled on for too long.. They have not been listened to or respected. They have consistently been obliged to put up with a situation whereby they have been the price takers while all others along the food supply chain have been able to set prices and continue with their margins. This issue has been bubbling up for years because the prices and the margins farmers have been getting have been consistently eroded to the extent that they cannot see a future for themselves in the sector unless things change. We must ensure that there is fair play for them. They feel they have been totally let down by meat processors in recent years. The fact that there is no clarity as to what margins farmers get for the work they carry out in producing beef illustrates the lack of transparency in the sector. We have seen estimates ranging from 20% of the final amalgamated price going to the beef producer, as indicated by the Beef Plan Movement, to an indication from Bord Bia that it could be 60%, to Phelim O’Neill, a very respected markets commentator in Irish Farmers' Journal, indicating, on the basis of his analysis, that it is 50%. The fact there is such a massive range in the percentage of the margin that goes to farmers in terms of the estimates shows the total lack of transparency there is in the system.
Farmers feel, and rightly so, that they have been down by the Government. If we go back to the grain crisis or the fodder crisis, the Government has been unresponsive to farmers and their predicament. The most recent contribution by the Government in the context of the losses endured by farmers in the past year was the €100 million beef emergency aid measure scheme, which was announced in a blaze of glory the week before the local elections as a straightforward compensation scheme. It was sold that way a week prior to polling day only for farmers to hear a week later that it was laden with qualifications and conditions such as the 5% stock reduction. The Government knew the reaction that scheme would have got from farmers if the 5% stock reduction had been outlined prior to polling day. Again, farmers felt they were sold a pup and disrespected. Against that backdrop, it is no surprise that there have been the protests in recent weeks. As others have observed, those protests have achieved a lot. It is now essential that we see an outcome that can be built upon by and that can deliver for farmers.
The response from the Minister in terms of the speed with which talks – either the first round or the second - were put together was not in any way as hands-on as it should have been in view of the gravity of the crisis. The first talks were put together on foot of an announcement made on a Wednesday but they were not scheduled until the following Monday. Likewise, when the second round was being put together, the Minister was much too hands-off in terms of ensuring that the leadership was not divided in order to get people back around the table, which was the only place where the matter could be resolved.
Coming out of the weekend’s talks we have a deal on the table to which the seven farm organisations contributed with six of them are actively advocating it and the seventh – the Independent Farmers of Ireland group - has indicated it is bringing it back to the picket lines. It is essential that we as politicians allow the time and space for the farming organisations to engage fully with their members and with farmers in terms of the merits of that deal. The comments made by the President at the National Ploughing Championships, in which he indicated that this may not be the best solution but that it can certainly be the best beginning, should be reflected upon by people.
It is essential that the case made by farmers be built upon, that the four-movement rule, the residency rule and the 30-month rule, which are key issues for those on the picket lines, be genuinely and properly addressed in the coming months and that the task force will be set up promptly to address the issue of transparency in the beef sector.
The other matter on which we need to see immediate action from the Minister is that relating to the need for additional aid from Europe in respect of the losses experienced in recent months.
The beef exceptional aid measure scheme covers a reference period from September 2018 to May 2019 but the prices since May have been lower than those months covered by the reference period. It is absolutely essential that we see further aid now to compensate farmers for those losses experienced, to assist with the difficult experience they have had and to bring something additional to the table on their behalf.
I will leave it to my colleagues to make their contribution. I certainly hope that we see a change of approach once and for all where farmers are recognised as the foundation of our beef sector, which needs to be respected, needs to have fair play and needs to provide a decent margin and a decent living for the important work it carries out.
Like the rest of my colleagues, I still have a concern about the beef industry and where it is at. The price farmers have been getting for a number of years has not been viable. These protests have not come about overnight. I refer to the desperation among farm families that their way of life is disappearing from under them. The single farm payment, in real terms, has been eroded over time. For a number of years, it covered up many of the deficiencies in the price being returned to the primary producer.
Since I was elected to the Dáil in February 2016, the Government has not listened to my party on the plight of beef farming in this country. We have had numerous Private Members' motions and every month when there are questions to the Minister, we have raised the problems in the beef sector.
We all knew, when quotas were discontinued in April 2015, that there would be an increase in livestock numbers in this country but we have failed to have the safety valve of live exports adequately utilised. We saw in the spring where we had the disaster of not having enough lairage space in Cherbourg for Friesian calves and, as we speak tonight, there are no cattle over 12 months of age leaving this country. We have had numerous markets announced for live exports but, unfortunately, no cattle are moving. Live exports were always the safety valve that kept pressure on the meat processors to pay a viable price. That was always what kept competition in the trade.
Unfortunately, farmers have lost trust and confidence in parts of the industry. Farmers have lost confidence in Bord Bia. The question being asked is whether all the beef that is leaving this country is of Irish origin. Is the beef stamped as processed in this country being produced by Irish farmers?
On the negotiations, while the Minister states there have been increases in the bonus, we can only judge that when we see the base price that the factories announce. Unfortunately, the differential in the price between cattle under and over 30 months still remains. There is the four-movement rule. While there has been some movement on the residency, none of these issues has been resolved to the satisfaction of farmers.
Even allowing for this, I would urge the farmers on the picket line to allow the kill to recommence, but with a strict deadline of 1 January where the aspirations in this agreement can be assessed to see if they are being fulfilled. We need to get the autumn kill under way. Farmers need to sell cattle but they must be given assurances that what is in this agreement will not be allowed gather dust and that the aspirations in this agreement will be examined carefully and delivered on.
The competition authority has failed farmers. I can give numerous examples of how this has happened. We need an independent authority to be brought in to examine fairness in this industry. Whether it is for rendering or for price, we need the competition authority to be brought to task. Before I hand over to other members of my party, I will refer to the Joint Committee of the Agriculture, Food and the Marine which had the competition authority in a couple of months ago to examine a scheme between Kepak and Glanbia. Under cross-examination, the head of the competition authority told us that the scheme was uncompetitive but because it was only for a small segment of the marketplace, she would not do anything about it. I said to her that day that it is okay for a processor to sin a little but not a lot. If that was farmers, the competition authority would take action.
I endorse the words of my colleagues, Deputies McConalogue and Cahill, in regard to the serious financial pressures on beef farmers, not only now but for a considerable length of time.
No enterprise can continue if it is producing product that is sold below the cost of production. That is not sustainable for any sector or for any commodity. We rightly use the word "sustainability" in the area of food production. The beef sector that is such a key ingredient of our overall agrifood sector is under serious pressure today. Deputy McConalogue spoke about confidence, as did Deputy Cahill. When there is not confidence in a sector, that necessary investment or commitment can ebb away very quickly.
My party tabled a Private Members' motion in this House in March last. We outlined in detail the issues that needed to be addressed by the Minister and by the Government. Some of them were dealt with to some extent in the agreement reached on Sunday last. We had the area of the 30-month age restriction, the four-month rule, the 70 days' residence. It is time to listen to the eminent Professor Paddy Wall in regard to the age restriction. Thankfully, we are a long time away from the BSE era when those restrictions were quite rightly put in place.
I put questions to the Minister and to the Minister, Deputy Heather Humphreys, in regard to the implementation of the EU Directive on Unfair Trading Practices in the Agricultural and Food Supply Chain. In fairness, the Commissioner, Mr. Hogan, brought that forward, warts and all. It was a step in the right direction but the Minister, Deputy Creed's replies to me indicated no urgency in transposing that EU directive into legislation here. It is another ingredient that would be extremely important in tackling the serious issues confronting the beef sector.
I concur with what my colleagues stated. Ba mhaith liom cúpla ceist a chur ar na hAirí. Why do the Ministers not listen and why are they reactive rather than proactive? My colleagues and I warned them time and again of impending crisis, including the one we are in now, and they bring it to the wire on every occasion and wait until the horse has bolted to try to do anything.
In March last, my colleagues and I brought forward a motion that included much of what they agreed in their talks over the weekend. If the Minister had listened that time and heeded us, we might not be in the crisis that we are in now.
I met many farmers in west Cork over the summer. They are on their knees. The prices they are getting are not viable. They cannot make a living. As well as that, there is the knock-on effect in respect of workers in the meat factories around the country, one of which is in my home town. Many people have lost their jobs, perhaps temporarily. Many have faced changes in circumstances where they have had to go to Poland. This is a significant loss to the economy of my town of Bandon and I plead with the Ministers to try to sort this crisis out.
I again raise the issue of beef farmers in my Limerick constituency with the Minister. It is fair to say that this issue has been dragging on far too long. The talks, which the Minister convened belatedly, have yielded some result but it is important we realise that this is only the beginning of the process of sorting out the issue for beef farmers.
There is no other business - farming is a business - where the primary producer would be expected to operate at a loss. It simply would not happen. The most basic rule in economics is that one has turnover for vanity and profit for sanity. If a farmer cannot make profit, he or she will not make income to exist. In my constituency, when farmers are making money, they will invest it in their farm enterprises and in their local economy.
I ask the Minister, in conjunction with all of us, to ensure the task force that has been established will follow through, that the base price issue will be addressed, that the other issues, including the 30-month rule, the four movements and lairage, will be addressed conclusively and properly so that we can tell beef farmers in Limerick and beyond that they will have a future farming in this country. Otherwise, we are in dire straits.
The lack of trust in the meat processing industry among farmers is enormous. For years, farmers have not believed they have been getting a fair return from the marketplace. In their minds and the minds of a lot of people, the Minister has failed as an independent arbitrator to put in place a regulator that would have brought some transparency to who gets what from every kilogram of beef that is sold. There is a belief among farmers that while other players in the industry - the processors, traders, retailers, hauliers and contractors - all get their margin and all get paid ultimately, the farmer has to take the price that is given with no reference whatever to the cost of his or her production. That cannot be maintained. It has to change. No other aspect of Irish society operates on the basis of being a price-taker regardless of the cost. So much of the livelihoods of others depends on the primary producer. Now people are starting to talk about the employees in the factories and to realise that there are others who depend on the livelihoods of farmers. If the farmer is not able to sustain a living for his or her family, all the other consequences will flow from that and it will impact on many others in society. The Minister must understand that many farmers, particularly those in designated disadvantaged areas, are unable to finish cattle in less than 30 months without using expensive meals and ration. There is no justification whatever for the 30-month rule. It must increase to 36 months without delay. Most people fail to understand why it has been allowed to continue. The issue of residency also has to be addressed. It has to be reduced to 30 days. The four movement rule must also be addressed.
If the Minister intends to stand by and watch the dairy herd grow by a further 30% in the next five years, he will be credited with the destruction of the beef farming sector. It makes no sense in terms of the impact it will have on the beef sector or in terms of our climate change commitments. That aspect needs to be addressed too.
I acknowledge that the Minister has engaged with me behind the scenes as we attempted to get some type of settlement for this situation. It is very important that I put that on the public record this evening. However, as far as I am concerned, the game is up in terms of the farmers being promised a fair deal on the extraordinarily good product they produce in the way they rear their cattle. This is why people are holding out. While I acknowledge that there are some very good things in what has been put on the table, I will make one plea to the Minister and the processors this evening. I urge them to meet the beef plan people again. This problem can be solved with a little bit of understanding from both sides. Everybody wants it solved. People have spoken about the farmers. There are workers and their families living in desperation as to where this is going. A young man with borrowings and leasings of almost €200,000 on a couple of Scania trucks told me that if this continues for another two weeks, all the business he was getting out of the factories will be gone. A lot of people are affected by this and many of them are very worried. We have to make every attempt to get this over the line. I appeal to those processors who are listening this evening to move one little bit. We can do this. We can get further discussions going behind the scenes. I am confident we can get this sorted out in 48 hours. Many people are troubled and upset. We owe it to those in the farming community who are producing an outstanding product to give them a little leeway. Trust is gone and it has to be rebuilt in the farming sector, or else we are going nowhere. I appeal to the Minister to get those people to take one more step to get this over the line. I believe we can have a settlement on this matter.
I am sharing time with Deputies Cullinane, Ferris, Martin Kenny and Buckley. I acknowledge the commitment of all the farmers across the country who took the difficult decision to go on the picket line over the past two months. It is unfortunate that it has come to this. It is because of those farmers that the issue is now on the agenda. I have spoken to many farmers who were at the factory gates. They did not protest out of choice. They stood on the picket line because they felt they simply had no other option. This was their last opportunity to save their livelihoods. They are taking to the picket line for the simple reason that it is no longer economically viable for Irish beef farmers to produce at a baseline price of €3.45 per kilo. Teagasc is telling us that to be any way viable, as a break even-price they have to be getting €4.17 per kilo. That is basic economic reality. All the signs are that the protests outside the factory gates will continue until the baseline price increases. Everybody wants this solved but that is a fact we have to recognise. Beef farmers are caught in a perfect storm. Not only is their margin squeezed, with some of them going backwards financially into the negative, but they are also facing the effects of Brexit and the looming Mercosur deal. Farmers are going out of business. Beef farmers can no longer support themselves and their families. Some families are facing the prospect of losing property such as their home. They have large debts for on-farm investments that they have made in recent years. They were borrowing money to buy fodder because of the fodder crisis last year, and saw the effects of that going into spring this year.
How has it got to this? This has developed over the past two and a half decades. We have allowed the Irish beef sector to be run in a cartel-like manner by very powerful people with very strong political connections. Why has their power been left unchecked for so long? It is a cartel-like situation where those running it can decide whenever they like to manipulate beef prices for their own selfish reasons. That is being done in a number of ways, including through feedlots, the only purpose of which is to ensure that the price of beef is suitable for the cartel-like owners and processors. That is the situation that Irish beef farmers have been up against on a daily basis. That is why they are so angry.
One of the solutions is to provide greater transparency. During the summer recess, I published the Mandatory Beef Price Transparency Bill 2019 as an attempt to contribute to a solution. We understand that this is not a silver bullet. It does not meet all of the farmers' demands and will not solve everything. I am not naive enough to think that. It goes some way towards ending any suggestion of manipulation in prices. The factories would be compelled legally to report into the system daily. It would go some way towards ending the high level of mistrust between the farmers and factories. I have never seen such mistrust. I have been in situations involving striking workers and employers where there was little trust and great anger on both sides. However, I have never seen the level of mistrust and anger that is involved in this situation. I am taken aback by how far people have gone with this. We have to try to rebuild, as we all recognise. Only then will we be able to see the huge gap between what the customer pays and what the farmer gets, and who is being ripped off.
I recognise that progress has been made in the beef talks with regard to better bonuses and premiums for cattle, and also that the processors have agreed to drop all legal action against protestors. There are some positive steps but they do not go far enough. I also want to say to the Minister, in a helpful way, that the statement put out on his Facebook page last evening has not helped matters, unfortunately. I met farmers today who were taken aback by some of the content. Those farmers who are represented by the Independent Farmers of Ireland do not believe they are being unreasonable or difficult for the sake of it. They do not want to be on the picket line and would prefer to be on their farms working. They feel they have no other choice because the deal does not go far enough. All they want is a fair deal. All the signs are that they will not leave the picket lines no matter who tries to talk to them unless the baseline price is dealt with and trust is rebuilt. Farmers who have been protesting in places like Rathdowney and at the National Ploughing Championships today are loud and clear that they will not go home and we will be back in the same situation in six months' time unless those issues are dealt with.
The sums do not add up. I recognise that new premium payments have been proposed that will increase bonuses for quality cattle, but the big suspicion is that the processors will simply reduce the baseline price, which would completely wipe out the bonus payment. The Minister said there will be a bonus payment for 70% of all cattle being killed. That is good, but the problem is that every farmer to whom I have spoken firmly believes the factories will simply pull down the baseline payment. I say that with all sincerity to the two Ministers present. They believe that is the next move. Farmers are the most vulnerable link in the beef supply chain. It is time we put an end to that.
The beef sector needs a more proactive approach. It needs the Minister to get all the stakeholders back around the table for one last time to get the deal over the line for all farmers, especially the small and medium size farmers who are outside the factories picketing out of sheer desperation. They are out there because they know this is their last stand. They know that this is the last opportunity they have to save their livelihoods. That is the reality.
The information I have is that there is a monopoly situation in meat processing. The five major producers depend on one company to take the offal. One major operator can effectively manipulate the industry if it wishes. I urge the Minister to take the issue seriously and to respond to me on it in the coming days. The situation must be investigated by the Department and by the Competition and Consumer Protection Commission as a matter of urgency, because if one major operator controls one part of the processing industry it has huge influence over the other four processors. If we want a beef industry then farmers need to receive a fair price because if the farmers do not have a livelihood and are producing at a loss we know where this is going. The Minister of State, Deputy Doyle, is a farmer as well. It is the iron law of economics that one cannot run at a loss over a period. The processors know that as well.
Further progress is needed. The beef emergency aid measure must be renewed and improved. The €50 million is available but it is restrictive. Another scheme is needed because we are in a crisis. We must sustain farm families, keep the beef industry in this country and make sure that we have a good quality beef industry. We must get the current dispute resolved, get the factories back open again and ensure farmers have a fair price for quality produce.
The farmers who are on the picket lines at the moment are not the big ranchers. They are not the farmers that are running the factory farms or feedlots; they are small farmers who run family farms and graze their cattle outdoors. It is the type of farming that we should encourage as it produces the high quality beef a lot of us eat and that is sold around the world because of its quality. I get a real sense of injustice from the farmers I meet on the picket line. I also met some of the leaders of the groups off the picket lines to discuss their issues. They are also taken aback and not pleased with some of the narrative around the protests that the farmers are protesting in a militant way. They are just people who want to provide for their families, who are reasonably standing up for themselves and their families and who are not getting a fair price for what they produce. They are not even getting a price that is necessary to allow them to do what they want to do. It is simply becoming unviable for many farmers. That is made all the worse when they are up against the big beef barons. When I was in college I heard in debates in this House about the big beef barons who had connections with very senior politicians. The big beef barons are still there and they are still running the show. They are very powerful individuals and they are squeezing the farmers dry. It is the family farmers who are being squeezed dry by those individuals.
I know a lot of people who work in the factories. I have every sympathy for all of the people who have been laid off, who are being treated as pawns. They are being used by some of the big beef barons as well because they want to use them as pawns. Most of them are on very low pay. We might say we have a difficult job but I know a lot of people who work in the meat processing plants and it is a very difficult job, which they do for very low pay. There is anti-trade union practices in some of the companies as well. They are the people we are dealing with and they are the people farmers are unfortunately having to go up against. Deputy Stanley is correct: there is a monopoly or a sense of a monopoly at play here. We have a responsibility to deal with that.
We all know that the ingredient for the resolution of any conflict, protest or dispute is, in the first instance, negotiation and that people are around the table. There must also be a level playing field without preconditions. In addition, there must be a sense of fair play and that there will be a fair outcome from the talks for the farmers. Despite the fact that some farming organisations have signed up to the deal, while farmers recognise there has been some progress, which is without a doubt, they still do not believe there has been fair play. That is a problem for all of us, not for one party or for the Government, because we collectively have to make sure that we do our best for the farmers who want to produce the food and the beef that some but not all of us consume and the produce that is sold around the world and creates jobs in many areas.
The problem is that the system is broken. That has been the case for quite a while. The Minister is aware of that, as is everyone who has been involved in the situation. It goes back 25 to 30 years since we had the consolidation of all the small meat processing plants around the country into the hands of a very small number of people. That created a situation where we were told that the market would solve the problem and that we would have new efficiencies. Those new efficiencies have led to a situation where, first, the people who work in the meat processing plants nowadays, by and large, are foreign labour who have come into the country because of the very low wages that are being paid in them. Years ago, there were many meat factories in my area and one always knew the farmers who worked in them because they wore white wellingtons. They stood out. There were loads of them. They worked in the meat factories in Longford, Dromod and Rooskey and the situation was the same in every county in the country. Nowadays, there is a handful of factories and all of the people working in them are foreign labour because the pressure was downwards, not just on the wages paid to the workers but also on the money they paid for the animals. It is the same thing: the farmers are being treated in the very same way. There has been downward pressure in order to provide the product at a cheaper price supposedly, but really what is happening is that all the money is being taken by the processors in the middle. That is the problem. The farmers cannot continue like this.
The point has been made several times that it is an international market and that we get the average price that is paid in Europe. We do, but the problem is that the product in this country is not the average product. It is different. It is unique. We have a family farm setting. The animals are free roaming and grass fed and there is traceability from farm to fork. Nowhere else does that, yet we have an average price. Farmers are seething with anger that they are being used in this situation. The Minister is aware of that. He spent some 40 hours at the negotiating table with them. What we must do is recognise that the key to the situation is price. It is ludicrous to say that price cannot be discussed. If one is going to bargain about anything, it is the price one has to bargain about. Farmers need to get a base price that reflects the level of work and effort they put in. I do not need to tell the Minister that; he knows it, but, unfortunately, the system that has been set up is not in favour of the primary producer, the people who work in the meat plants or the consumer but in favour of those in the middle who make all the money and who are ripping off the entire hard-working community whom we see at the ploughing championships and across the country. Rural communities depend on the farming community to be vibrant and sustainable. If the farming community is vibrant and making money then everyone makes money. We need to get back to the price. Until we get to that point and increase the base price for the animals going into the factory, we are going nowhere.
I knew on the completion of the latest negotiations and the press releases that followed that the assumption of an agreement was false. It was false because the talks did not deal with the main issue, namely, the base price. We would not have a beef industry without beef and suckler farmers. We would not have all of those people employed in the industry. How can farmers continue to produce beef below cost?
How can they sustain that? How can they keep that going? I cannot understand for the life of me how farming organisations came out and were half-welcoming what was agreed. It was a false negotiation. The negotiations have to be about price. If it was not about production price, it meant absolutely nothing. It meant nothing to the people in the west of Ireland with 20 suckler cows and who are trying to rear good beef cattle: it meant nothing to them because they are producing below cost.
There is a situation where the multiples and the cartels are dictating the negotiations and terrorising farmers by telling them they would get injunctions and take their land. That is what they have been propagating and putting out there. I am told the same cartels employed for very low wages people who are non-Irish nationals and not alone do they employ them but they house them and charge them €100 a week for a bed in a house that they share with somebody else. These are the people we are talking about, these people who control the whole industry and by extension have influence over the political system in the State, and nothing is being done about it.
It was a shameful negotiation. I fully support the independent farmers who have picketed and continue to picket. I will be there with them because they are fighting to survive and fighting for their livelihoods. They have been neglected and betrayed by those who represent them at certain levels.
How do we deal with it? We deal with the cartels, with the people who take a quarter for themselves and allow nothing to go back to the producers. We deal with the fact that while we know what the processors pay for cattle, we do not know what they get from the big multiple retailers. A Bill is being brought forward by Deputy Stanley to try to address that issue. It will be very interesting see how many Deputies in this House, in particular Government Deputies, will back it. The Bill will ensure processors have to show what they are getting for beef and what the big retail units are paying for it. We know what the consumer pays for it and we know what the producer gets for it, but we do not know what happens inbetween. We also need an investigation into the abuse of workers by these cartels.
Only a number of weeks ago, I spoke in the Chamber about the Mercosur deal and highlighted that prices could fall dramatically. Couple this with the no-deal Brexit and we could be facing even stronger threats to the viability of farming in Ireland. Farmers are seeing that the action they have taken over recent weeks is their only option. They see this dispute as the last stand before their livelihoods are wiped out completely and gone forever. I am also very conscious of the 4,000 workers within the factories who have faced or are facing lay-offs. However, if we are to be honest, it is not fair that the factories are using factory workers as pawns to turn communities against each other, when all the farmers want is a fair price for their product, as we have heard many times.
On a point that nobody has hit upon today, the highest rate of suicide in Ireland is among those aged 45 to 54. We know anecdotally that many farmers have taken their lives in recent years and we know that economic desperation kills.
There is an escalating and basic point that people are not seeing. Factories need farmers' products, workers need to work and farmers need to produce beef to sell it. The only solution is to sit down and to talk honestly. I recognise that some, if very little, progress has been made but, for many, it is simply not enough. As has been brought up many times in the House, and if Members will pardon the pun, the main beef is the price that farmers are getting paid. The product we have in Ireland is unique and is one of the best in the world. Why should we be penalised?
The overall objective is to ensure sustainability of livelihoods for everyone involved. Without proper dialogue and discussion by all stakeholders, we could see another situation like the loss of the Mallow beet factory or the fertiliser industry in Cobh. Surely nobody wants to see the beef industry going in the same direction. I appeal for everybody to sit down and to be honest. It is time the Government treated the farming industry, the families and the communities they support, as well as the workers, with honesty. If there are cartels, collusion or fraud, now is the time to stamp it out. Do not let these families be cast aside and left alone to die under the grass because there will not be cattle there to eat it, only themselves.
I thought I was in Rip van Winkle land for a while. I am the longest serving and oldest member of the Oireachtas agriculture committee - I went on it in 1993, a long time ago. I remember when I protested strongly against the cartel movement and certain individuals taking over particular industries and consolidating them. I was nearly trampled by farmers for opposing those things - I was being a communist, I suppose. Many who spoke today would be people who opposed the views I articulated at that time and which I still hold. When we create monopolies and cartels, the victims are the people at the lowest rung of the ladder. Monopolies and cartels have exercised muscle, power and monopoly, and they give people what they like and that is what people have to take.
The last thing we should do in the Dáil is contribute to any misinformation or to mislead the farming public into thinking that certain objectives are achievable which may not be so and in effect advocate for the legitimate expectations which can arise from over-promising and from false hope. I know this because I stood on the picket lines with many farmers and, indeed, I did a lot more work behind the scenes, helping out certain organisations - that is all I will say about that at this point. My advice has always been very straight and strict.
At the end of the day, this will come down to price. Cool heads need to prevail on all sides. We need to reflect carefully on the agreement that has been reached in the past number of days. Some people have doubts as to the bona fides and the trust that one can invest in the processors and there is understandable anxiety that they would ever honour anything. However, insofar as we can take people at some degree of trust, I think this heralds an opportunity for a new beginning to secure the necessary improvements in farm incomes from beef enterprise. A significant amount of progress was made and a significant number of the objectives that were set out by the various organisations involved, some of which I was advising, have been achieved, which must be acknowledged. I and my Labour Party colleagues have certainly listened carefully to what the president said this evening, namely, this is the first step. The oak tree did not grow overnight: the acorn seed was there and from there significant progress was fleshed out. Although I do not go around the press looking for any kudos, I have done a lot of work behind the scenes and I have many contacts. I believe a small increase in the base price, along with the other achievements, would bring everybody around to accepting that this is the first step. I hope this can be achieved.
Agreements, by their very nature, are predicated on compromise, which eventually means that none of the parties achieves what they set out as their objectives or goals at the beginning. Farmers are justifiably frustrated about the low price of beef compared to the price of production and the desperate income situation that prevails on so many farms, which would be worse only for the single farm payment system. Partial decoupling came in during 2001 and then full decoupling happened in 2005 and decoupled payments from output. Those have become devalued in terms of purchasing power, which is another issue. The single farm payment was brought in to complement price, which we should not forget, and that was said at the time by the Commissioner. I was there: I was listening carefully to all of this and I took it in.
There has been a perfect storm brewing in agriculture. I did a study in 1983, when there were 120,000 suckler cows. In 2013, there were 1.17 million suckler cows. I warned about this and there was cacophony of sound from everybody and every party in this House except myself. I warned about Harvest 2020 and about the 2025 targets for cattle. When the abolition of milk quotas took place, I warned about what would happen. What did happen? There were 290,000 extra milk cows.
And they all had calves.
And 290,000 calves. That is the story. Then, we had people bellowing and roaring that they wanted us to provide subsidies so they could export calves, the very same crowd who were buying calves down the south for €2 or €4.
They then wanted a subsidy and extra lairage. Imagine having the neck to come into a committee and ask for that. I know of many rural shops that are closing, and they do not ask for subsidies. They employ many people but did not get many subsidies or much sympathy from anybody here. Let us be clear about a few things. How dare anybody come looking for subsidies. They are getting calves for nothing and then they want somebody to subsidise them to go abroad. God bless us. It is horrible stuff.
This is a perfect storm. Just look at what is happening regarding the CAP payment. We will lose €12 billion. Apart from Brexit, there are other factors. There is a €12 billion hole that has to be filled. That will be single farm payments. Ireland has indicated, through the Taoiseach and the Minister, that we will play our part, but other countries, the four big ones, are resisting. There is not a word of capitulation from them yet, that they will help fill in the deficit, and that will mean further trouble. Then we have the Mercosur deal hanging there. There are the climate change issues as well as the supermarket retailers. We had better be careful here. I keep telling every farmer - I spoke at a fairly big meeting a few weeks ago - that out of every ten calves produced, nine must be exported and only one is eaten at home. That includes the Pat McDonaghs and the seven big retailers, the multiples. That is all that is eaten at home. I want to go after the retailers and get them in here, but they refuse. In 2010 I was Chairman of the Committee on Enterprise, Trade and Employment. They refused to come before the committee to explain themselves. The processors, Mr. Goodman, ABP, Dawn Meats and all the others, are private unlimited companies, so we do not know what they are doing or how much money they are making. It is the same with the retailers, the big multiples, so nobody knows. That is the big problem and the reason Jim Power has done a study and thinks it is 40% to 45%, the difference between the take from them - the primary producer, the retailer and the processor. The processor says the farmer is getting 65%. The primary producer, the farmer, says he is only getting 20%. Nobody knows anything. It is all guesstimate work, and when we get that transparency and a price regulator in place, then we will know. We have been calling for that for many years, but it is probably not that easy. Do not tell me about the Competition and Consumer Protection Commission. If there is a little business somewhere, it will find some method of ensuring that it drags it before the appropriate courts. I was on a committee in 2010 and 2011 with Ned O'Keeffe and so on. We actually hired a master's degree student to try, under darkness, to investigate whether there was a cartel. My view is that if it looks like a cartel and walks like one, it has to be one.
Good man, Willie.
There are currency fluctuations, falling demand and changing consumer preferences. They are all there, whether we like it or not. Veganism is becoming a big issue. As somebody who likes a bit of beef and eats it anytime I get it, I was surprised when a 62 year old man told me the other day he does not touch beef anymore. I said to myself-----
Like the Taoiseach.
He is like the Taoiseach.
This man is not a Taoiseach or anybody like that; he is a professional man. He says he does not touch it. That is part of the issue. We have to recognise that. We cannot be blind to what is happening. That is what is going on. Sometimes in here we try to set out what is happening out there and are told, "Oh, that does not happen at all." Some of us here try to invent reality, but I face reality, I am pragmatic and I try to get solutions. If we solve this thing tomorrow, I ask colleagues not to be fooled. I will be gone out of here. I will not worry. They will have to deal with it, but I ask them not to be fooled. In 12, 24 or 36 months, they will be back again because a fundamental restructuring of this industry has to take place, and that is the problem. Sticking-plaster solutions are grand, they get one over the hole, but that is no good because long term, this will implode. I have always held that view of this industry. It is a €3 billion industry. We have falling prices. We are talking €3.50 or €3.60. If a farmer got the €3.60 and could get the various things that are promised, premiums and subsidies and the like, we would get close to €4, but anybody going out of here tonight and pretending that €4 is achievable this evening or tomorrow is grossly misleading and telling lies to people.
I agree with the Deputy.
That is absolutely wrong. I have another profession but I trained as an agricultural economist with Professor Sheehy, and the one thing he always told us as economists was to tell the truth, and I am telling the truth to people from experience and knowledge. We carried out those studies 40 years ago, so let us be clear. Beef production output in the EU has gone up by 2%. It is now 102% self-sufficient. Here we are exporting nine out of ten animals to an area that is 102% self-sufficient. That is why we have to get to the Chinese and all those other markets. Some of them are not as profitable as others. I heard somebody giving out about Bord Bia. I always saluted Bord Bia because I know some of the people in there. Aidan Cotter has retired from it now. He was a person who was deeply committed to getting the best for Irish agriculture and the beef and sheep sector and he did an excellent job. I know he has gone on to something else now and I wish him well.
All these things have created a problem, so the current situation is just a manifestation of long-term problems that did not come up overnight. There is no mushroom thing in this. This has been welling up for the past 25 years.
And more, and it bedevils this important sector. I keep warning my own brother about the suckler cow. For the last ten years, I have been warning him to be careful but the reason most farmers continue is that they have an inherent love for what they do in an open-air setting and he is as happy as Larry. For beef farmers, €4,791 was the average income in 2018, and 125% of their farm income is made up of the single farm payment. The average single farm payment in the country is about €13,000-odd. Of course, too many lords and ladies are getting this subsidy, including one of the major beef processors, which is seeking injunctions against people. It is one of the biggest recipients of this. It goes back again to my time as a young man, green behind the ears. I objected to that. I am on the record many years ago saying there should be no place for subsidies for corporate farmers or anything of that nature. They should get nothing. I was proposing capping it 20 years ago and people said, "Oh, sure, that fella comes from the Labour Party and they are communists." That included some farmers and farm organisations, and it was farm organisations that did not have the guts to come along and say what they thought. Why should farmers from the west of Ireland get about €5,000 or €4,000 in subsidies, if they are lucky, and some very rich well-to-dos with 250 or 1,000 acres get €105,000, €110,000 or €120,000? It does not make sense.
Subsidies were brought in to sustain the maximum number of farm families on the land, not to ensure that ranchers and corporate farmers are sustained, so until we tackle that, we will be back here articulating and mouthing the same thing, and I will watch from the sidelines, saying, "Good God almighty, it is like Rip Van Winkle stuff again." So let us be honest with one another. That is the place to start.
Dairy is profitable and in 2018 the average income was €43,000. I agree with Deputy Kenny that Irish beef is produced to the highest environmental, welfare and traceability standards. With green grass production, everything is great and there is traceability from the farm gate to the fork. We have all that but all those issues will not go away, and I did talk about the abolition of the milk quotas. I think the Minister may well remember that. I advocate that he deal with some of the issues. Red meat clearly has an important role in a balanced diet, and that must be emphasised and not lost sight of.
As producers of a commodity, beef farmers are effectively price takers. We have approximately 70,000 beef farmers and approximately 1.8 million cattle processed by 35 processing plants in a year.
This is a recurring flashpoint. I hope we resolve it tomorrow. I plead with farmers to reflect carefully and not to be misled. Teagasc has set out a figure of €4. That is the objective. That objective will not be achieved in a flash. It could be attained with a combination of things that are integral to the agreement that was reached last Sunday. We all know that operating at a loss is not a long-term strategy. What worries me, as I have said to people on the picket lines, is that looming over the current adverse situation is the shadow of Brexit. We could see the implementation of World Trade Organization rules. That would mean we would be uncompetitive in our largest market, with the UK market taking 50% of our beef exports. We will not be talking about €4 but wondering if we will get to €3. Let us be clear that is what would happen.
Can producer groups help? This critical mass of farmers banding together would facilitate negotiations with the processors. A number of them have been in operation. I know the Minister has given the go-ahead lately. Everyone needs to know that when one is in a producer group, one cannot go running around. People have to band together. Getting three quarters of a cent extra somewhere else should not make one leave the pitch. People have to stick with their producer group. I have met farmers who ran away when this sort of thing arose. Farmers should stick with producer groups. I see fixed price contracts as a better way forward. As it is now, the farmer takes all the risk. If a farmer has a fixed price contract, he or she knows what he or she will get. Irrespective of currency devaluation, fluctuations or market conditions, the farmer knows what he or she will get and that is safe and secure. Farmers have to work towards that. It would involve sharing the risk between processors and producers or farmers. That is to reassure farmers and give them confidence.
We have to think outside the box. The day of just bringing the animal to the mart, getting dinner in the middle of the day and going home, like we all did, and socialising, which is an important part of the mart, is diminished unless we change things through those new strategies. We have an opportunity. Given the importance of farming to the rural economy and our traditional way of life, the job of Government is to assist farmers who have been struggling for years. The Minister has to talk to the EU. He has the €100 million and the beef is there. I brought to his attention one of the deficiencies. Young farmers under 35, who are well qualified, and started to build up a farm three or four years ago, are being asked to take a 5% reduction. That is a nonsense. We have to have a situation where they can continue and to ensure that they are protected and not subject to reductions. They are only getting on their feet. It is important that condition is applied and that exemption is available for them, otherwise we are setting off on a fool's errand. We have to have a sustainable future for farm workers.
It would be remiss of me, as we discussed today in our Parliamentary Labour Party meeting, not to mention that a group which is largely forgotten with the current situation is the workers. Some 6,000 workers have been laid off, including by C&D Foods. Three rang me recently who are being laid off. They are worried about the uncertainty that they face. They have nothing to feed their children, to pay mortgages or to pay for cars. That is significant. They are working in the past. It is low-paid, precarious work. Meat Industry Ireland initially refused to negotiate with the farmers. In fairness to the Minister, he got it to the point of negotiating. It also refused to engage with the trade unions representing workers. The workers were told they could apply for social welfare payments when they were laid off. SIPTU told me that many workers in meat plants have come from abroad on specific work permits and are not allowed to apply for social welfare or to go for other jobs. Meat plants are a source of employment in many rural areas where few other jobs are available. In planning for a sustainable future for the beef industry in Ireland, provision of alternative jobs for meat factory workers must be a central consideration if, as seems likely, the beef processing industry will shrink. That is my position.
I thank Deputy Penrose. I call Deputy Barry. I do not know if he has ever brought beef to a mart, but no doubt he will tell us.
Some 355 workers were laid off today by ABP. Some 6,000 workers have been laid off in total. Thousands more are facing lay offs and those who have been laid off temporarily fear that it will be more than temporary. In this dispute to date, we have heard the voice of the meat industry, the Government and, at least to some extent, the voice of the farmers. It is time for the voice of the meat factory workers to be heard. I encourage them to raise their voices and to get organised to defend their interests in their area, their workplace and throughout the country, since it is a national issue. Other speakers have pointed out that meat factories have attempted to join trade unions and have attempted to win recognition in their workplace for their trade unions. That recognition has been denied. An attempt has been made to push them back when they have tried to organise.
When the meat factories reopen, they should be organised, unionised workplaces and the meat factory workers need to begin a discussion on that now. They can take a degree of inspiration from the farmers because the farmers have stood and fought their ground against powerful forces in the establishment. The meat industry and beef barons are a powerful force. Attempts have been made to use the courts against them, including court injunctions. The farmers have stood their ground and defied that successfully. Workers, and not just meat factory workers, can and should take some inspiration from that. If meat factory workers are discussing the position they find themselves in and the threat of temporary lay-offs being more than temporary, then an issue which needs to be discussed and considered is the idea of saying that workers would go into the meat factories and stay there, state that these are their jobs and they will not leave until they have their jobs back. That would need to be at least discussed and considered. When the plants reopen, will there be a fair and just settlement or not? There should be a just settlement for the farmers and their families. The farmers say that for €10 paid on beef, they get €2, with €2.90 going to the processors and a majority, €5.10, going to the big retailers. That is an extremely unjust division of the spoils.
Average farm income in this country was €23,000 last year but the average dry-stock farm income was only €10,000. There are farmers on those picket lines who live in poverty with their families. The core issue here is the base price for cattle which has dropped from €4 per kilogram last year to €3.45 per kilogram now and the talks last weekend did not change that. It seems to me that the mood among the protesting farmers is that the base price issue must be addressed. The final say on whether the protest continues will not be in the hands of the beef processors, the Government or the President, for that matter; it will be with those farmers at the factory gates. They are the ones who have to make the decision and there needs to be an increase in the base price to have any chance of a settlement here. If they reject the current proposal, they are well within their rights to do so. It is a democratic issue for a group who are involved in a campaign. It will then have to be resolved on the basis of a better offer being made.
The Labour Party representatives have left the Chamber but I always enjoy listening to Deputy Penrose. He referred twice to the Labour Party being mistaken for communists but I do not know if there are too many people who would make that mistake these days. He also commented on a relative of his who he said was as happy as Larry, which was an interesting phrase to use in a debate about the beef industry. Deputy Penrose was right to say that there are other crises looming for the beef industry, including Brexit. The Government's position, as I understand it, is that in the event of strong blows to agribusiness and the beef industry in the course of a no-deal Brexit, for example, subsidies will be provided by the State to the industry. One of the stated aspirations is to help to protect jobs but as I understand it - and I ask the Minister to clarify this - it is not intended to make the protection of jobs a condition of state aid. It seems to be more of a hit-and-hope scenario; here is the state aid and we hope that you do not make as many people redundant or lay off as many as would otherwise be the case. What is being proposed here is to give State subsidies to some of the richest business people in the country, those who dominate the beef trade, namely, the beef barons, who have attempted to drive this dispute in order to starve farmers back to work, to get their own way and defend their own profits. As other speakers have rightly said, they have also attempted to use thousands of workers, including low-paid and vulnerable workers with families, as pawns to get their way.
I am in favour of State intervention to protect jobs in the event of a Brexit crisis. However, I am in favour of a different type of intervention to that being proposed. I was on radio last week, on C103, a station well known to the Minister. I spoke to Ms Patricia Messinger, an interviewer who is also known to the Minister, who had been debating the beef crisis for an hour beforehand. I had not had a chance to listen to the previous debate and was coming in cold. I raised what I thought might be a new idea for the debate, namely, that the beef industry should be taken out of the hands of the beef barons. I suggested that it should be taken out of private ownership and, in the interests of society, placed in public ownership and under democratic control. To my surprise, she said that I would not believe the number of phone calls and messages that the station had gotten that day supporting that very idea. I think she thought that I had been listening in and was jumping on the bandwagon but I was actually coming to the discussion cold. That is an idea that would be popular in society. It would certainly be popular among meat workers who would see it linked to the defence of jobs and it would be popular among protesting farmers who would see it as a way to achieve a more just solution than the one being offered by the beef barons and profiteers. I am putting on the table in this debate the idea of public ownership of the beef industry, under democratic control. I could make some points about the supermarkets in that context but time precludes it. Perhaps I will raise that issue again on another day.
Finally, Friday is a day of global strike action on the issue of climate change. Once more school students across the world will leave their schools and come out onto the streets to demand change to protect the climate and defend the environment. Friday's strike will have a new element to it because for the first time significant numbers of workers and trade unionists will participate. I understand that in Britain, for example, four major trade unions have called on people to take action on Friday. That will be a new element, although in the main, it will still be a protest of young people. That shows which way the wind is blowing. Agriculture based primarily on beef, given the climate crisis, is not sustainable over time. In any case, there is a new generation that is eating and will eat a lot less meat and many have made the decision not to eat meat at all because of climate change. We need a sustainable agriculture and that means that there must be a transition away from beef but that transition must be just. It must be a just transition for all, including the workers in the industry and the farmers who supply it at the moment. Such a just transition cannot and will not be achieved on the basis of market economics or on the basis of control of the industry by beef barons and profiteers. It can only be done on the basis of State intervention, subsidies and public ownership of the industry under the democratic control of the workers in the industry and of the farmers who supply it.
I thank the Ceann Comhairle for giving me the opportunity to contribute to this debate. We need to bring about a situation where beef farmers have a fixed share of the price paid by supermarket customers for beef products. A lot of anger is being expressed by farmers around the country at the moment regarding cattle specifications and also the difference between the supermarket price and the factory gate price. We need to see transparency in this area. The price margins that are operating across the beef chain must be transparent and clear. A robust mechanism must be put in place to ensure that farmers get their fair share of the final retail price for their animals. The fact is that the further the animal goes from the farm gate, the less information is made available on price. That is why beef price transparency across the supply chain must be addressed in the context of securing a fixed but fair proportion of the final price for beef farmers.
The agreement between the meat industry and farm organisations that the Minister secured last weekend provides the basis for starting to rebalance power within the beef sector but we need to see movement on the base price for beef from the meat processors.
The fact is that there is a serious lack of trust among farmers, and there is a feeling that the base price will now be manipulated by meat processors to make up for concessions agreed in the talks at the weekend. This cannot be allowed to happen if there is to be a resolution to the dispute. We need to see a fair base price quoted by processors. While many are legitimately arguing that price cannot be discussed, there is no legitimate argument not to seek a secure margin for farmers, who are producing a premium product not just for the Irish market but also for the EU beef market.
Sean O'Rourke's interview earlier today with Mr. Cormac Healy of Meat Industry Ireland was very interesting. Mr. Healy stated that the industry is paying €3.60 per kilogram for R grade cattle, which is the base price reference. He pointed out that this price is currently the EU average but farmers on the ground across this country are being quoted only €3.45 per kilogram today for cattle of grade R3. This is 15 cent per kilogram less than what their representative said on national radio this morning was the EU average and what farmers should currently be getting. The fact is that we need a legal floor to be put in place for the base price for beef. Each week the EU publishes beef carcase prices. The EU average should be used as the benchmark regarding the base price quoted to farmers. This is the very first step needed in bringing about price transparency for cattle. At least farmers could then relate to it. I refer to where a black-and-white figure is provided on the return to the processors across Europe.
In light of the distinct lack of information on margins in the processing sector or the farmers' share of the carcase price received on EU markets by processors, including the volumes and values of specific cuts, there is now an urgent need for measures to be taken to provide beef price transparency right across the supply chain. As an interim measure, I suggest that the Minister ask his colleague the Minister for Business, Enterprise and Innovation to request the Competition and Consumer Protection Commission, under section 10(4) of the Competition and Consumer Protection Act 2014, to carry out a market study on the nature and scale of consumer and beef farmer issues in the market and make recommendations, as appropriate. People are rightly critical of the commission in the House tonight but there are mechanisms by which it can be used to benefit farmers and consumers and bring about transparency in the beef sector in this country. I ask the Minister to ensure that the Minister for Business, Enterprise and Innovation, Deputy Humphreys, directs the commission to do something for Irish farmers instead of threatening them continually, as has been the case up to now.
My research clearly shows that, regardless of what share the farmer is getting for a carcase, in each of the past 15 years the farmers' share for beef produced has reduced by 1.7%. This cannot continue any longer. The tools exist to carry out an investigation. That investigation needs to start before the end of this week.
There is a need to consider innovative technology that could help to rebalance the farmers' share for the beef product. The Department of Agriculture, Food and the Marine should immediately convene a cross-sector implementation group to establish a publicly owned and controlled national beef supply block chain which has the potential to transform the beef supply chain by reducing production costs and emissions and allowing the farmer to receive a premium return for beef while providing consumers with greater confidence in the beef they consume. If this does not happen, the processors will bring forward the block chain and increase the stranglehold they already have on the industry.
I am sharing time with Deputies Fitzmaurice and Nolan.
Like the Deputy who has just left the Chamber, I am not a beef farmer. I am not a farmer at all and I do not come from a farming background so I am probably coming at this with a lack of knowledge. I have, however, been a member of the agriculture committee since 2011. I have heard farmers talk about their circumstances at meetings of that committee. I do not remember representatives of the beef companies talking at meetings of the committee at any stage. They are probably the only ones in the sector who have never appeared before it. That is interesting. Nobody has any idea what the beef factories are making or doing. When there is any talk of prices among farmers, there is always deflection from the beef companies. They never seem to have any responsibility at all. This is the crux of the problem. The beef factories get away all the time. One aspect of the crisis that has developed is that there is a focus on the beef factories and purchasers. This is good.
Much has been made by farmers about the need to get the representatives of the supermarkets to meetings of the committee so we can talk to them. I was at committee meetings previously at which representatives of the supermarkets were present. There was talk of vegetable prices, for example. Only 10% of Irish beef is sold in supermarkets in Ireland. Therefore, I do not see the purpose of hammering the supermarkets over what they are doing in Ireland. If they increased the price of their beef by 100%, it would mean nothing to beef farmers. That is the reality. Obviously, they are all part of chains. These are selling in England and on the Continent. We might get some insight into how they put pressure on the factories to put pressure on the beef producers to reduce the price but I am sure they will not tell us that at a meeting of the committee, especially in the context of Irish beef producers and the way in which Irish beef is sold.
I agree with those who stated that the base price needs to be increased because that is what will make a real difference to farmers. The base price is what they get and everything else is an add-on. What is included in the agreement is all the add-ons. This will make some difference to some farmers but addressing the base price is what will make a difference across the board. We need to have some sort of system with a minimum base price. That is the reality because there is no doubt but that the farmers cannot continue to be squeezed in the way they have been in recent years. EU payments that are lumped in are actually making up their income and selling the beef is basically justifying those payments. That is the way it goes. The only beneficiaries in the long run are the beef factories. They seem to be making large profits. We do not know because they are all privately held and owned. We can only guess what they are doing. That is a real problem in getting to the truth.
I agree with all of the other Members who have raised those issues. I agree with Deputy Penrose, who talked about the problems with the beef industry. They have been there for years. I remember local abattoirs, which have been closed for many years now. They all provided competition at the marts. When a farmer went to a mart selling a cow the local abattoirs would bid as well as the beef factories. The marts have all been closed down. In my area of south Donegal, a number have closed. The marts have been closed by stealth. The Department imposed costs on them to force them to get up to speed and then came back a year later to impose further costs. I know of one local abattoir in my area that spent £40,000 - it was pounds at the time - to improve the place and bring it up to standard. It was visited again six months later and hit for another £20,000. How could the standards have changed so much in six months to make that happen? That had the effect of closing the abattoir, which took someone out of the bidding war at every mart taking place in Donegal town. That happened right across the board. There are now only one or two local abattoirs left in the county whereas there were 15 or 20 before. That reduces the number of people bidding to buy the beef when it comes into the mart. That is a problem and results in developments further on.
The situation now is that the beef factories are basically operating a cartel. They are fixing the price and that is the price that farmers have to take. Farmers are quite happy to take it and that is also sad because I believe - and I have had discussions about this previously - that farmers could come together to provide their own killing facilities and market their own beef and lamb. Farmers, however, are of the view that they only grow things and sell them on and that they are not interested in processing or anything like that. If one wants to be sure of getting a genuine price, however, that is what one has to do because the one certainty is that the beef barons, as they are called, are not interested in giving a genuine price for beef. That is what has caused the problem we now have.
On the beef plan which the Minister has been discussing and the outcomes of the discussions, he says that "an independent examination of the price composition of the total value of the animal" will be undertaken by the Department. How can the Department know the price composition when the beef producers do not disclose their figures? Will the producers tell the Department what they do? How can the Department stand over figures coming from the producers? I am interested in what the Minister has to say on that.
The reality is that the base price is the issue that will sort this out. If there is to be a resolution to this issue, it will involve the base price. Some way has to be found to ensure such a base price. It is the only way this issue will be solved.
I thank Deputy Pringle for giving me the opportunity to speak. We are all aware that this issue is 20 years in the making. As I have often said, one cannot turn on a light switch and solve everything overnight. In fairness, the farming organisations went in for discussions over the weekend. It was unfortunate that Meat Industry Ireland would not meet them directly, but in fairness to the Minister and the Secretary General, they tried to hammer out a deal. There are good things in this agreement. From what we have heard in recent days, there may not be enough, but there are good things such as the 8 cent per kilogram bonus for cattle over 30 months, the increased bonus of 20 cent for cattle under 30 months, the review of the 30-month rule, which is needed, and the four-movement rule, which is absolutely crazy. One of these could have been dropped if it had been based on movements because the first person's name would not be put down. The reduction of the residency requirement to 60 days is also welcome. Those measures are positive, as is the index, which will allow farmers to know what is going on in Europe. We need transparency in the whole industry. From my understanding, the staff in the Department provided great help in respect of the purchase organisations, POs, over the past week or ten days.
The Minister asked all of the farming organisations to go out and sell the deal. It is therefore very disappointing that tonight - ten minutes ago - I got a call from an individual in one of the farming organisations who went out to sell the Minister's deal, which was agreed by the farming organisations, telling me that one of the factories had sent legal documents and now intends to say that this person was part of a protest as a result of going out to sell the deal on Sunday or Monday night. That is not the spirit of partnership. It is disgusting to think that one of the factories or processors would do this. That information has just come to my attention.
There is another issue in solving this problem. I went to a place on Sunday evening and guys came to sell the deal. It was not going down well. The farmers acknowledged that there were good parts in it. People were told to read it again up to last night, when they came back again. The one sticking point at the moment is the base price. Everybody here, including the Minister and me, knows that this is the issue. Whether one is a producer with 500 or 600 cattle or a PO group with sheep, let us not hide from it or duck it. Let us be honest and open. There is between 10 cent and 15 cent to be had from being in a PO. That is how it works, because a PO can supply the commodity that is required. I spoke to some of the sheep groups today. They told me how they operate and what is given. It is sad. If MII recognised the POs, progress could be made overnight. I ask the Minister to go back to MII and talk to Mr. Healy who is doing a lot of shouting on the radio, as was noted earlier. He said €3.60 was available as the base price. That is a lie. The base price given last night and this morning was €3.45. If the producers are giving €3.60, let Mr. Healy come out and confirm that. Otherwise, I ask the Minister to go back to MII and Mr. Healy. Are the producers being stopped from paying this price by certain individuals in the meat industry? This matter can move on. If the POs are recognised by all the meat processors, and the deal that is generally done is agreed, it can be solved. No one is asking for anything over and above that. There is nothing underhand or overhead. This is the way it is done throughout the rest of Europe. Indeed, there is precedent for it in Ireland. This issue can be solved.
There is also anger with regard to Bord Bia and this needs to be addressed. A month ago, one could not sell an animal in the North under the nomadic rule. Cattle are shooting up and down today and Bord Bia gives them quality approval. There is something unusual about that. We also have to look at the protected geographical indication, PGI. As was said earlier, we are in danger of losing 70,000 farms that produce beef. We have 345 feedlots in this country. Should they be given PGI status if the animals are looking out through a barrier for most of their lives? Should we instead recognise the people who are producing animals from grass and give them the premium price they deserve? There are decisions to be made.
Everyone around this country acknowledges that there are many cattle that need to be killed. There are also sheep that need to be killed. People need to reflect on where everything is. When we are talking about jobs, no one talked to the factory workers' unions. The unions sent letters to MII but no one talked to them. The producers simply laid off the staff. A broken down subcontractor going from one water job to another would keep his or her staff going for a month. The conglomerates should be ashamed of themselves for letting their workers go when one considers the profits they have made. MII has decisions to make. It must tell the various factory owners to engage with the POs and do the deal. That is what it comes down to. This can and must be sorted in a day or two.
As Deputy Cahill touched on earlier, we also need to make sure that the export of live cattle is kept up. We have to ensure that we get whatever ingredients or facilities in other countries that we need to do so.
It is damning to see Hungarian or Italian beef with a Bord Bia mark on it-----
That is not true.
-----when our own beef is struggling in markets in various parts of the country.
In the context of the offal business, my next point is not for the Minister. Will he speak to the Minister for Transport, Tourism and Sport about lengthening the distances? Under EU legislation, we can go 250 km. Lengthening that might give options when one person controls 70% to 80% of this country's offal business. That situation holds many people to ransom and may not allow them to talk.
Whoever made the decision to take the legal route after the Minister had asked people to go to a gate and sell something needs to have a rethink. Mr. Cormac Healy needs to approach his processors and ask them to stand up and be counted once and for all, with less mouthing and more action, and to engage with the producer organisations, POs, tomorrow morning on doing what the sheepmeat POs have done and what is being done around Europe. This situation would then be solved in one day.
Gabhaim buíochas don Teachta Pringle a thug an deis dom labhairt anocht. In recent months, I have spoken to farmers across Laois and Offaly, and I consistently raised the issues concerning beef and suckler farmers a number of times before this crisis kicked off. Some of the farmers I spoke to have never been on a protest before in their lives. This was a case of necessity, with them being forced onto the picket lines in the hope of salvaging their livelihoods and those of the sons and daughters who hope to succeed them in farming. It is a disgrace that the crisis has escalated to this point instead of being resolved. In fairness, the Minister brought the stakeholders to the table, and I commend him on including the representatives of the Independent Farmers of Ireland group. The more stakeholders involved, the better.
We need to go back over the situation. Farming families have been put in a desperate and distressing state and have not been rewarded for their produce and hard work of many years. This situation must change if we are to make progress and move forward. Agreement on the base price and total transparency are crucial for the protection and survival of the sector. If we are to build better relations based on trust between the various stakeholders, including the meat industry and Bord Bia, both of which have serious questions to answer, then that is the point at which we must start.
Farmers forced onto the picket lines have already stated that they will immediately lift their picket if a fair base price is agreed. Such a price or contract must be agreed urgently in order to allow farmers who want to return to their work to do so, factory employees to return to their jobs and sheep farmers to access the factories.
The factories and beef barons have made significant profits while our farmers have made serious losses and have lost all confidence in the meat industry and Bord Bia. This cannot continue. A fair price and respect must be given to our beef and suckler farmers. A fair base price must be agreed.
I must point something out to the Minister that came to my attention during the summer. Supports for beef and suckler farmers must be examined. In particular, the criteria for the beef exceptional aid measure, BEAM, are unfair and require a reduction in herd size. Many farmers who had hoped to enter the scheme could not do so because it stood to lose them more. We need to address this matter. The European Commissioner stated this week or last that it would be an embarrassment if the majority of our beef farmers did not accept the scheme, but the real embarrassment is the fact that the Commissioner has not fought hard enough for Irish farmers over these criteria, removing restrictions and allowing our farmers to enter the scheme. I am mentioning this now because it is an important issue.
Farmers on the picket lines have stated that they will immediately withdraw. I hope that they will do so, but the base price issue must be addressed quickly. Seeing our farmers suffering has been shameful. It cannot continue. I call on the processors, who are undoubtedly watching our proceedings tonight, to offer a fair price to farmers and to give them their long-overdue respect in order to save the sector.
We must recognise that agriculture has been the backbone of our economy through the bleakest of times. I live in a rural area in which I am surrounded by beef and suckler farmers. I have the utmost respect for the hard work that they do. They deserve it.
Farmers have stated that they will in no way agree to anything less than a fair base price. They have drawn a line in the sand. We need that price fast. In addition, I call on the Minister to ensure more supports for farmers in Project Ireland 2040. Will he please increase the direct payment to suckler farmers to €200? It was disappointing to see it at only €40 per cow last year. The €1 billion Brexit fund for market supports and direct aid needs to be implemented in addition to a compensation fund for farmers who supplied cattle post 12 May and are now losing a combined €4 million per week on beef prices. All of these measures would collectively help the farmers.
In mid-July, my colleagues in the Rural Independent Group and I made a direct plea to the Minister and the Government to intervene formally in order to avert the further destabilisation of the beef sector. We stated that we were increasingly concerned at the absence of a beef round-table forum at which grievances and positions could be constructively aired and that would in turn have allowed us to address the long-term challenges facing the beef and suckler sectors. However, it was to be several weeks more before the first talks began. The Government was too slow off the mark. The Minister and his colleagues sat idly by. When the Government finally started talks, it said on a Wednesday that they would be held on the following Monday. This was at a time when the pickets were already at the gates and workers were threatened with losing their jobs. The Government sat idle while Rome burned.
Beef farmers told us that they were experiencing significant levels of frustration with the Minister's apparent unwillingness to take a more hands-on approach to the crisis affecting the industry. Like us, the Minister and the Minister of State are rural Deputies. We had all witnessed the unprecedented anger among farmers, yet there was still a delay in getting the talks going. There remains a palpable sense that, despite the agreement reached at the weekend, the situation is not materially better for the majority of farmers. As Deputy Nolan and, quite eloquently, Deputy Fitzmaurice stated, these are historic issues and have been ongoing for more than 30 years. If it walks like a cartel and looks like a cartel, it is a cartel. The fear and ineptitude of successive Governments in tackling this issue have been disgraceful.
What of the permanent government? I have no dispute at all with the former Secretary General of the Minister's Department, but he has been appointed as the independent chair. What would have been wrong with appointing Mr. Kieran Mulvey or someone else who was truly independent and with having openness and transparency? In his time as Secretary General, the man to whom I refer was involved in drawing up many of the rules that farmers want removed, for example, the 30-month rule and the four-movement rule. By any yardstick, how could he be classified as independent? It was shambolic, to say the least.
Some great work was done in forcing the Beef Plan Movement off the field through threats of injunctions. Then the Independent Farmers of Ireland group came along and the Minister reluctantly allowed it into Agriculture House last weekend. It was treated despicably, I might add. I salute Ms Alison De Vere Hunt from Tipperary, Mr. Ger Gough and Ms Maggie Delahunty. They were left in a room on their own for hours without anyone returning to them. To be treated condescendingly by the assistant secretary was despicable. Today, the Taoiseach dismissed them as if they were not there or talking, but they are there. They are at the gates. They will leave the gates as soon as they get a base price per kilogram. It is as simple as that. As Deputy Fitzmaurice said, the issue can be resolved, but we need that base price.
Now there are threats and embarrassment and upset about people in my town of Cahir, where there has been a temporary shutdown and nearly 400 jobs have been displaced, with a further 180 to go. Have these people any loyalty to our workers? I have tried all through this situation to negotiate cattle in and cattle out, meat in and meat out, and for unimpeded access by all kinds of repair and maintenance crews in Cahir. I thank the Garda for its involvement and the protestors for being cordial.
Management is trying to bully people such as this. As Deputy Fitzmaurice said, those of us who employ people would not dump them on the road but would keep them on as best we could and find work for them. The companies need to be brought to heel. Cartels have been operating since Charlie Haughey bailed them out. They started at that time and the position has got worse since then. The Minister must get involved immediately and drag these people to talks, including the independent farmers and the representatives of the people who are at the gates of the factories now. We will find a way forward here through talking. That is what we need.
It is only proper manners to offer our sympathies to the Minister and his family on their recent loss.
What has happened over the past number of months is a culmination of the frustration that exists among decent people who only want to make a living. Other people are making money from beef but not the people who produce it, stay up late at night with cows calving, buy ration and take animals in during the winter and try to put weight on them and get them ready for the factory. Those people have not been making money. I compliment farmers, young and old, who stood protesting at the factory gates and brought this to boiling point. Their work culminated in the parties sitting down and trying to thrash out an agreement.
I am not happy for one minute that this agreement can be welcomed with open arms or will solve all our problems because it will not. I compliment the different groups that have worked on this, including the Beef Plan Movement, the Irish Farmers Association and the United Farmers Association. In County Kerry, Mr. Dermot O'Brien, a man from Firies, has come to the forefront of the Beef Plan Movement.
I was at factory gates and met people who were protesting. I will give one example and it would be no harm to listen because these people are neighbours of ours. I met a female farmer one night, a woman who has given her life to farming. She was making a sacrifice to be at the factory gate. She had buried a daughter only a couple of weeks beforehand and was protesting because, as she said, she had to be there. The Minister should think about that. That woman was there because she felt she had to be. She was a respectable woman who had given her whole life to farming. These are the people to whom the Minister and the people operating the factories should be listening. We cannot have a situation where one or two people can have a cartel and control everything. There are ordinary, decent farmers the length and breadth of Ireland who are the backbone of this country and we should be there to protect them.
I will give an example of the frustration that exists. I received an email a while ago from a man who told me he was writing from a total sense of desperation. He and his wife are small beef farmers and, after two loss-making years, they are fighting for their right to earn a living from their family farm. Both their sons are interested in farming and are pursuing green certificates. Unfortunately, as things stand, the ambitions and work of that man and his wife, as well as the ambitions of their sons, are going down the drain. The beef protests that are ongoing are to try to secure a margin for farmers like that. The email goes on to state what that family wants us, as their public representatives, to do for them.
This has happened on the Minister's watch and he was very slow coming out of the traps. Many of us were looking for the Minister and could not find him when we wanted him. It was late in the day when he came out. I do not go backwards; I want to think about going forward. All I want is that our farmers who are producing beef will get fair play and honest pay for what they are producing. They have not been getting it and I am worried they will not get it after this deal. I have concerns about that, as the Minister knows. It is incumbent on every one of us to fight for our farmers. They were the backbone of the country when it went into recession because they were the only people who kept rolling along and always doing their best. We should never forget our farming community. I thank the people who went out and protested because we, as politicians, and the farmers of Ireland, owe them an awful lot.
I was elected to this Dáil in 2016 and I have brought up the plight of the beef farmers throughout this country since then and, indeed, before then. We have a crisis mainly because successive Governments protected those inside the factory gates. In doing so, they forgot the man and woman on the farm who put in so much work to put meat on the tables of this country. Since 2016 and before, no one listened and now we have a crisis above all proportion and many people are staring ruination in the face.
There are 80,000 beef farmers in this country. It is estimated that if any of these farmers goes out of business, it will lead to a loss of €30,000 to his or her rural community which will, in turn, lead to further closures of creameries, shops, pubs and contractors in that rural community. The crisis we have at the factories today could well have been avoided if we had been listened to. Now we are where we are.
The Minister has been telling these farmers to go home for the past month. The factories have been telling them to go home or they will take legal action against them. It has been a case of David versus Goliath. Instead of the Minister coming down to factories such as the one in Bandon and talking to these God-fearing, honest farmers, he continued to taunt them. I know that because I have met and spoken to these honest-to-God men and women every day since this peaceful protest began. They are suffering, working at a loss and cannot continue. They cannot pay their contractors because everyone is creaming off the animal the farmers sell but they are getting the least money. The factories are creaming off it and are untouchable. The large retailers are creaming off these farmers and cannot be touched. The Minister was not able to get these people around the table for the past month. The factories called the shots and would not make a serious effort to bring about a successful solution. Instead they have been hiding behind rules and regulations made by successive Governments and put in place to protect them. In doing so, these Governments sold the farmers right down the swanny.
The negotiations last weekend could have started at least two weeks ago. The farmers called off the protest outside the factories at that time. There was a lot of talk but the power of the large retailers and factories made sure this would not work. This was a serious breach of trust as far as all the farmers who were protesting outside the gates were concerned.
In my view, bilateral discussions were not the way to go about resolving this dispute. Everyone should have been brought around the table. The farming organisations should have gone back to their members on the ground before they accepted the deal that was struck last weekend. Their members outside the factory gates last Sunday night were furious because, under the agreement, we will continue to see farmers making a loss on animals they are selling. The farming organisation should have gone back to its members and discussions should have continued to look at issues such as the 30-month age condition and any other issue that is causing major problems for farmers today.
The base price needs to be increased. This should have been ironed out last weekend and must be dealt with immediately if we are to get solutions for this crisis. The farmers outside the factory in Bandon and every other factory in the country have had enough. They do not trust the factories or the Minister and have told me that. They are not happy with the Leader of the Opposition, Deputy Micheál Martin, because of his continued silence on this crisis for Irish farmers. They want this dispute resolved. They are reasonable men and women, as was proved when the Chinese delegation came to Bandon a couple of weeks ago and there was an honest agreement by all protestors to allow them in unhindered. That proved that these are reasonable people but they have been abandoned by successive Governments.
Where is the Taoiseach on this issue? He did not listen to us over the past number of years and now we are where we are. It is time for the Minister to wake up and resolve this crisis immediately because these farmers are near the edge and the Minister must protect them.
First, I sympathise with the Minister and his extended family on the death of his uncle.
I went to the ploughing championships today. It was a grand sight on a fine day. I met grand people from all over the country, especially Kerry. Every manufacturer and supplier that was at the championships today is dependent on the farmer. We are at a crossroads. I have raised this issue with the Minister and Taoiseach since early last year and throughout this year. These farmers cannot continue to operate at a loss. The deal that went through in the past few days is not satisfactory because it is not going to affect the base price.
As Deputy Fitzmaurice stated, €3.40 or €3.60 is not good enough. The Minister is as good at mathematics as anyone else. It will not work.
We looked for different things. The 70-day rule, which was a ministerial or departmental rule, was brought in on foot of BSE. Why can it not be got rid of now? The Minister is shaking his head but it is a fact that BSE is no longer an issue. There is no foot and mouth disease now. I am talking about the 30-month rule. An extra six months would mean that the cattle could be fed in grass and finished in grass and the farmers would get a little bit more out of them, but that is not what is happening. That was not adhered to. On the four-movement rule, if a carcase is hanging in a plant, can any man or woman tell me how many times it has been moved? It is ridiculous, yet if the CAP states that the animal has moved more than four times, the farmer is going to be paying.
Like everyone else, I love my bit of land. I bought it 25 years ago. Farmers are trying to stay on their land and continue with their activities but they are not being treated fairly by the factories.
I thank all the people who stood at the gates for the past number of weeks in order to highlight the blackguarding of the farmers. They gave of their time unselfishly. I thank the Beef Plan Movement for arranging all the meetings in Cahirciveen, Bantry, Castleisland, Listowel and Kenmare and at all the mart venues throughout County Kerry where farmers came to highlight the situation. They did not go there in the dark winter for fun. They are not being paid fairly, and all they want is a fair price.
It is sad that the Taoiseach stated he is doing his bit to reduce carbon emissions by not eating meat. That compounded the despondency among farmers and it is a sad reflection on the Taoiseach. We then had more people suggesting that we should increase our global carbon emissions targets to hurt farmers more. We know that oil is already dear enough and it is to increase because of something that is happening in Iran. When we talk about Iran-----
I call Deputy Harty.
Just one minute.
How is it that the Iranian ambassador asked me why we were not exploring markets for beef in Iran?
Deputy Harty is being deprived-----
I am sorry.
I forgive the Deputy. I thank the Minister for engaging with me on this issue and for speaking to me last week when I contacted him.
There is one meat processing factory in Clare, Kepak, which is located just outside Ennis. Effectively, it has the monopoly on beef processing in the county. As has been the case with all other factories across the country, farmers have been protesting outside the Kepak plant for more than two weeks. This is their second time doing so, having already protested earlier in August. Production has stopped, as is the case across the country. That is not in anyone's best interests. The Minister is aware of this. Farmers are fighting for their livelihoods and they are furious about the way they are being treated. They are very angry and that is the reason these protests are continuing. If these protests fail, the viability of rural communities will also fail because farming is the backbone of a community. The agribusinesses that support farming will fail. That will have a knock-on effect on schools and post offices as farmers are driven from the land.
Producing beef and being paid at a price below the cost of production is not sustainable. I know the Minister understands that also. That is particularly galling when other players in the meat industry - the processors and the retailers - are making substantial profits. That is not in the best interests of anybody. It is not in the best interests of the processors, even though they might not know it, the factory workers - who are now being laid off - Ireland's reputation, retailers or, ultimately, consumers.
The President's remarks at the National Ploughing Championships earlier were evocative. He stated that we must protect those who produce our food and treat them fairly. He stated that they are entitled to a fair share of the fruits of their labour.
Family farms are the backbone of Ireland. We have external threats to farming. Brexit is an external threat. Mercosur is an external threat but here we have Meat Industry Ireland, the processors - an internal threat - destroying the viability of rural Ireland.
When there is only one purchaser, and effectively we have only one purchaser because there is a conglomerate of beef producers who work collectively, there has to be effective transparency. There has to be structures, which include fair treatment for farmers, to ensure there is proper vigilance. Those are not in place at the moment so we must respect the work that beef farmers do.
I have spoken to a beef farmer who takes pride in what he produces. He loads up his cattle on a lorry to go to the processor and he is proud of the work he has put into those animals but he is shocked when he gets his cheque after they are slaughtered because he has done everything required of him. He has been transparent, complied with all the regulations and produced a high-quality animal yet when that animal goes into the processing factory, he gets a cheque which is way below the value of those animals.
Farmers are engaging in a physical blockade but the meat processors are engaging in a financial blockade. Effectively, they are driven by profit and there is a lack of both transparency and fair play. In effect, they are the target the Minister should speak to because unless they are forced to produce and pay a price which is equal to the cost of production, the farming community will get nowhere. If they will not do that, then there has to be a full investigation into the activities of the meat processing industry in order to ensure that they are not involved in price fixing, price manipulation or price control and that they are not operating a cartel. The Competition and Consumer Protection Commission must look into the activities of the meat industry to ensure that they are not acting in an anti-competitive manner.
I welcome the opportunity to contribute to this debate. It is clear that beef production is fast becoming non-viable. It is obvious that farmers are already upset. It is fair to say they are furious at this stage. While there were significant efforts to resolve the current dispute, particularly over the weekend, the problem is that people are not prepared to work for nothing. It is often stated that the most dangerous people are those who have nothing to lose. We can see today, as the protests continue, that this is the case. Not only are individual farmers affected, we can see the knock-on effects for those working within the sector and the communities in which they live, with in the region of 6,000 workers and their families affected. There is a high degree of uncertainty for that sector in all of this.
It is important that we tell the truth about farming-----
I ask for silence for the Deputy.
-----and that we look at creative and practical solutions, particularly for small farmers, before it is too late. The reality is that there is a worldwide glut of beef. That is one of the key reasons beef production has become only marginally profitable in Ireland in recent years. That glut is effectively driving down the base price, even in situations where we are not comparing like with like in terms of quality.
Any comprehensive review of where we are needs to consider the system of distributing EU payments, which appears to be inequitable. That has been a criticism over many years. The farmer with the biggest farm gets the largest payments and this has led to the swallowing up of small farms, particularly those producing beef, by larger dairy concerns. It is essential that the position regarding farming subsidies should be reconsidered and that these should, perhaps, form part of a basic payment relating to the maintenance of soil quality on and the diversity of farms.
This may give financial security, particularly for small farmers, to consider diversifying from beef. There is rethink needed on the short, medium and long-term approach. I appreciate that there is a crisis at the moment and it is difficult to get beyond that.
A resilient farming sector depends on diversity of production. In Ireland, of all countries, we should know that. It has also been shown by Teagasc that organic beef farming is more profitable than conventional farming. Many consumers are prepared to pay a premium for ethically produced beef. For most people, however, the decision will hinge on how much money they have in their pockets.
Support payments are not provided for the horticultural sector, which means it is very difficult for Irish growers to compete against the geoponic polytunnel deserts. Small horticultural ventures need basic supports to buy equipment and build up supply chains.
Brexit goes to the heart of food security. Buying Irish has never been more important given the threats to the agrifood sector and the security of supply lines. Encouraging farmers to "put up or shut up" and stay in an unprofitable business is mad. They will not do so and we should acknowledge that.
If prices are controlled by what has been repeatedly described as a cartel of processors, the Competition and Consumer Protection Commission has an important and immediate role to play. The Taoiseach made the point earlier today that it would be illegal to set the base price for the producer. He cannot have it both ways, however. If the processors are engaged in cartel activity, it needs to be properly investigated and we have an organisation to do such an investigation.
This is an opportunity to work with farmers rather than fight them. We need to better support them through diversification and generational renewal.
In the context of over-production of beef, the strong negative reaction to the proposed Mercosur deal is completely understandable. It is not just the rearing of capital for the beef sector that needs to be considered. It is the spin-out jobs in rural communities, which in turn drive local economies, that need to be considered. The Mercosur agreement is not just a bottom line exercise where other sectors of the economy are compared. That is without mentioning the unsustainability of the approach taken in terms of climate change and the proximity to markets.
In the current dispute, we completely understand why farmers feel the continued need to protest. The best chance of getting a solution is to reconvene talks, while acknowledging, as I do, the serious efforts that have been made, especially at the weekend. When this dispute is considered in the context of the impact it is having, it is clear the Minister must make another effort to get people around the table again to see if there is one last chance of finding a resolution to this. It will not be resolved by people on both sides engaging in a stand-off.
We face a real crisis. If we do not change our ways, we will see the demise of the family farm and the rise of an industrial farming model that will not serve our people, secure our future or benefit our society. I met a friend the other day who is a farmer in County Kerry. She cited a statistic - I do not know if is accurate but when I asked her to source it she said it came from Radio Kerry - that no one stands to inherit 60% of farms in Kerry. I believe that figure is probably about right. What are we going to do? The average age of beef farmers is 57 years, which means that in ten years 60% of those farms will become forestry or join a mega-farm.
Visiting the west in the summer, I met a man just on the right side of 50 who said he was the youngest participant on a training scheme for young farmers. I represent Dublin Bay South but I was stopped in the street once last week by a beef farmer and my office also received a phone call from a beef farmer asking what should they do. I did not have an easy answer for them because I am a Deputy for Dublin Bay South. This, however, is my view. We need a national land use plan. Teagasc has fought that suggestion in the Committee on Climate Action when we have argued for it and the Government did not provide for such a plan in the climate report. However, we need to plan what type of farming goes where. We cannot continue to have ABP, Kepak and other companies deciding that. We need a plan to decide what types of forestry and rewilded wilderness should go where. How will we approach our river basin management plans that integrate with all of those issues? Critically, what is the social dimension connected to a land development plan? Will we abandon counties Kerry and Leitrim? I do not think so.
We need to change our ways. We need to do a land use plan in conjunction with the new Common Agricultural Policy. My understanding of the EU approach is that it is not a top-down one. It sets the nine objectives, most of which are green and with most of which I agree. It provides that is it is up to member states to decide how to achieve these objectives.
We need to stop the current method of paying farmers. I attended the meeting of committee on agriculture some weeks ago when we discussed the beef issue. The simple truth, which no one disagreed with which is the nub of this problem, is that we are trading on an Origin Green brand and we are getting an international commodity price, as the Taoiseach said today. That is the problem. Our farmers produce very high quality product compared with other systems, particularly in the area of suckler beef. However, they are getting a lousy price and that has to change. How do we do that? The Agriculture Commissioner, Mr. Phil Hogan, has suggested the use of protected geographical indicators, whereby Irish beef, particularly suckler cow beef, would be considered special. The Department is looking at this proposal and some of the farm organisations support it. That is one way we could go. If we are to make our products special and be Origin Green, let us be really Origin Green. I am sorry if this is difficult but that will mean no longer having live exports. We cannot tell Green Party in the German market who would pay the higher premium that we are Origin Green and concerned with animal welfare, while at the same time shipping cattle to Libya and getting a lousy price for them for the farmer.
It will also mean that we will have smaller numbers and will also diversify because we cannot bet everything on international commodity markets. The Minister said that 50% of our beef is minced. We will not get the best price by providing every mince burger in Europe to keep this whole industrial farming going. The Origin Green product is not at the industrial end of production. The beef processor is at the industrial end. The farmers are so small that the power imbalance is significant. We need to change towards a real protected geographical indicator, which is connected to a real change in how we farm, and use all of the skills and quality that exists in Irish farming. Cattle should be grass fed but not in monoculture ryegrass deserts that are pumping our soil full of nitrogen and polluting our rivers and waterways to get as much grass out as possible. I am told by the leading academic experts in grassland management that mixed sward is where the future lies because it is more nutrient-rich and better for the animals' health. There are stronger roots so that when one has a drought one does not have the scorched earth we saw last summer. The Minister of State, Deputy Doyle, will have seen in the south east last year that our grassland systems could not cope. Three times in recent years we have been unable to feed animals here because the grass system failed as a result of climate change. We need to completely change our whole grassland management and move away from the pumped, high input, high cost system we use now which uses high levels of fertiliser that pollute the waters and adopt a much more resilient and biodiverse system that costs less, is based on better nutrients and the protected geographical indicator. Then we will really be the Origin Green country and we will get premium prices.
This would also help us. It will not be easy to pay farmers premium prices for genuine Origin Green product but I think we can do so if we really go for it.
However, Europe will not give it to us if it is not real and certainly the consumers will not buy if it is not real.
Second, we pay for storing carbon. One of our leading experts from the European Greens who negotiated the Common Agricultural Policy, CAP, reform, made a simple point, namely, that some of our upland grasslands, which would not be the best of grasslands - it would not be comparable to the Golden Vale - would be land where suckler cows graze. He said the best carbon management of that land, marginal grasslands on the hill, is to keep livestock on it grazing, not the big continental breeds but the lighter more indigenous Irish breeds. I have been told the advantage of that is to stop the land reverting to forest, which would drain the land and release the carbon. Rogier Schulte from Teagasc made the case three, four or five year ago when I was talking to him that we need a land use plan because the environmental case and the better case for agriculture go together. It is about time all of us realise that. We need to have a certain humility and to go to the farmers and say we may have the way forward that is better than some of the other political alternatives that have been laughing at us for the past three or four decades and that we are the ones to get them the better price.
There is a huge amount of skills other than farming skills in the areas of protecting biodiversity, testing water quality to make sure we restore pristine water conditions, educating a new generation of young farmers and paying farmers to do that before all these skills are lost. We need to improve access to land so that everyone feels they have a sense of connection to this. We need to connect farms to local schools. We have started to provide lunches in schools and we could contract farmers, say, six months in advance, advise them we will have a demand for vegetables, potatoes and meat in the local school in six months time and ask them if they can provide that produce. We could ask farmers if they could accommodate school visits to their farms as part of that connection. In the same way we could be connecting local markets. Why is it we only have the English Market in Cork and the Milk Market in Limerick? Why do we not have the same type of market in Dublin, Galway, Waterford and every other town? That is the way we will get over this. By doing that we would be living up to the Origin Green brand and making it all a holistic response. That is the scale of the change and response we need to connect the consumer. We should not forget the consumer in all this. The consumers are the ones who will set the pace. They will be eating less meat. They will be on planetary diets. It will be a more rare and special thing, something the consumer would pay well for, but we should not to be laughing at people if they become vegan or reduce their meat intake. That is their choice. We should not distance the consumer in this. By bringing consumers along with us and involving them in the process we will get the money to pay the farmers properly and rightly.
Deputy Breathnach can have three minutes of Deputy Ryan's remaining time.
If that is all right with the Chair.
It is not a matter for me, that is with the agreement of the Green Party.
That is fine.
That are four minutes remaining.
I thank Deputy Ryan.
Mistrust, suspicion, frustration, talk of monopolies and cartels and the most recent desperation of farmers could have been forecast by me and many in this House for a long time. Farmers have been led down a cul de sac and suddenly they realised they need to come back up to the crossroads. The solution to this issue is "transparency", a word that has been mentioned by many in this debate. Having spoken to many farmers and many people employed in the meat factories, many of whom have a deep connection to agriculture, I believe the farmers and the factories need to be friends not foes. During the past 20 years, the word "foe" has become more the norm than that of being friends. The crossroads farmers have reached is a critical point. We could talk about Brexit and the depressed state of beef demand not only in our nearest market in Britain but across Europe, particularly in terms of depressed prices. If we get a hard Brexit the issue of where we are now will have to be reconsidered.
I have a number of questions to which I hope the Minister will respond during the question and answer session. Can he assure farmers categorically that all of the actions and measures agreed in the talks will be stood over and delivered upon? Will he agree to appoint an independent food price regulator, which would bring some transparency? Deputy McConalogue and Fianna Fáil have been asking for that for a long time. Will the Minister commit to this House, as he indicated when I spoke on this issue earlier in the year, that the way forward is forward pricing? It is my belief that that can be achieved. The Minister seemed to indicate it can. Coupled with that, the issue of a base price in good faith needs to be arrived at by the factories. This industry is at a stage of imploding. If things get worse, it will implode further.
I have asked the Minister for Finance about supports in the event of a no-deal Brexit. Will the Minister commit to making sure those measures are in place in good time to give further support to the farming sector? It is no good providing them three months after things have imploded?
Deputy O'Keeffe has a the remaining minute and a half.
I thank the Minister for his full attention. It has been said that delayed reaction is a big issue that has arisen. My time is limited. I did not expect to be speaking. I will put a question to the Minister. Would it be wise to suggest that Meat Industry Ireland, MII, send representatives to each unit factory plant to get the management and the boys at the gates to talk? There are no proper talks going on among the various local plants. Following the Minister’s deliberations on Sunday evening, when everyone thought a resolution had been found, it was said that people should go back and talk to the individual plants, be it in Charleville, Bandon or, in my case, Watergrasshill. However, nothing is happening at the moment in regard to discussions. Would it be possible for MII representatives to get out of Dublin, go down to the plants, go into the yards and meet the farmers to see if they can thrash out the local prices? How anyone can come out of a meeting, and perhaps the farmers are at fault for this, without coming up with some kind of gentleman’s agreement on the base price I will never know. I know the Minister cannot give the base price but there must be something in the room that would give an indication of where the base price would come from. That is where the issue has arisen. Fair dues to all those involved. They covered bonuses, incentives, the 30-month rule and the 36-month rule. All that is grand but it is no good until we know on top of what that is being paid. I hope to speak tomorrow night on our motion on this issue. The Minister has done good work on the issue but we urgently need to get results. That key point is what is happening at the moment. Every farmer would pay the price if there was a divide and conquer approach. If there were no beef producers there would be nobody to buy the calves from the dairy farmers and nobody to buy feed from the tillage farmers.
That completes the 20-minute slots. By agreement, there are opportunities for questions and answers. Fianna Fáil has the first five minutes. I understand three of its members will ask questions and the Minister will answer all of them together. I call Deputy Rabbitte.
I thank Deputies McConalogue and Cahill for giving way to let me ask a few questions. What is wrong when a sector is full of part-time farmers who must subsidise their income with income from off-farm jobs and EU payments and who still lose money year after year and yet the larger companies profit endlessly? Why is Bord Bia adopting a policy of Origin Ireland that in the event of a hard Brexit would favour processors, compared with live exports, that will avail of a lower tariff when for years in the past live exports to the UK were effectively prohibited by nomad cattle designation? The closure of Irish meat plants is deliberately being done as part of the processors' Brexit exit strategy.
To follow up on what Deputy O'Keeffe has said, could the Minister engage with the MII - I am not seeking new discussions - to get its members to recognise the new and the only beef producers organisations that are in place so as to put trust and faith back into the sector? That has been lost. If the Minister was to make that call to encourage it to meet with the new organisation, we could help move people away from picket lines.
We have highlighted the phenomenal pressure beef farmers have been under for some time, which is an issue we have been raising for several years. As outlined, much of what was in the motion we tabled in the summer seems to be filtering through in the solution that was proposed earlier.
Among farmers, there is a great distrust. They are at a low ebb and see no future in it. Can the Minister recognise why they would feel that way having seen, for example, the €100 million beef scheme being changed before and after the council election? Can the Minister recognise the difficulty and the mistrust when they see their future, lifestyle and income slipping away? Is the Minister satisfied this plan will be the real starting point and where does he envisage a finished, improved point in this regard?
I will make a few comments on the meetings the Minister had. It undoubtedly was time for the Minister to have meetings and maybe they should have been held much sooner.
We learned that Meat Industry Ireland representatives did not go into the room with the farming organisations. Quite honestly, it is an insult to the genuine people, including the Minister, who were there at a meeting that they did not think it worth their while to go into the room, sit down in front of these people, face them and answer questions. It is a disgrace.
Of course, it is all about base price. While it is great to see the incentives, Meat Industry Ireland has stated that the price of beef was €3.60 per kilogram, but we heard today in the Dáil Chamber that the base price is €3.45 per kilogram. How can people have confidence or faith in a system? We are talking about this 8% increase, and increases of 12 cent and 20 cent. The people are not being treated fairly.
The decent thing for Meat Industry Ireland to do would have been to go into the room with those people, sit down in front of them and have a good debate.
I thank the Deputies for their questions. On the latter point, it is unfair to characterise the structure of the talks as any indication of an unwillingness of either party to engage with each other. They were conducted in a suite of offices. They were a series of bilateral meetings. There was no stated reluctance whatsoever on behalf of MII to engage but it was felt the best way, in the context of eight different parties to the talks, to structure it. That should not be misinterpreted as any reflection on the indication. In fact, there was goodwill on all sides from the commencement of the talks. That was reflected in the fact that eight different parties to the talks achieved a consensus at the end of it.
Deputy Rabbitte referred to the low-income sector. In terms of public policy, we have long moved from supporting product prices to supporting income and that is why the €100 million, to which Deputy Aindrias Moynihan alluded, is the response. The €100 million did not change in terms of its terms and conditions. The €100 million was announced and the conditionality attached to it. That is reflective of previous experience in that regard. On the dairy side, when there is an issue in the market of oversupply there is a conditionality attached to it of supply reduction.
I have commented previously about the toxic relationship. I believe this plan represents the best chance of a new beginning. It entails compromises by everybody but I believe with goodwill on all sides, it can work.
People have spoken at length tonight about the base price and the inadequacy of the talks in that context. It simply is not legally possible to talk about base price. The commentary here tonight on the variations in the base price was interesting. Some spoke of a base price of €3.45 per kilogram while others spoke of a base price of €3.60 per kilogram. It surely goes to show there is competition in the marketplace on base price. In terms of building relationships, that is something on which at local management level there should be better engagement. I have commented on that previously.
This is, like all negotiations, a compromise. It represents the best chance for a roadmap to go forward.
What has been discussed here in the past couple of hours reflects the position and the difficulties in the industry. We are all united in the view that the industry needs to be saved. It needs to be improved. We need to build trust and we need to try to make it sustainable for everyone. If it is not sustainable for the primary producer, as the Minister and the Minister of State will be aware, the show is over. We must all work to that end.
In the talks, I acknowledge that some progress was made. One can see that set out in the plan, in what is reported and in what has been revealed to us over the past couple of days. However, we can see it does not go far enough and the only place that will be settled is in further talks. Would the Minister agree to reconvene talks if that is clear across the sector? The factories are desperate for a solution. The farmers are desperate for a solution. As their political representatives, we want to see a solution. If there is a willingness on both sides, is the Minister willing to reconvene talks?
I ask these questions in the context of trying to come at it with solutions because we can come in and vent anger and everything like that but we must try to find solutions. I am not saying the Bill I brought forward is perfect but its aim is to try to get going the idea of legal underpinning of the price reporting. My party welcomes the fact that price reporting is built into what was agreed in the talks. That is a positive step forward. Can such price reporting be legally underpinned? One would not be setting prices. One would be stating that there was a computerised system where the factories would have to comply and feed in information daily, for example, on what price they were giving, for what bulk of cattle and for what grade. It is straightforward. Would the Minister and the Minister of State agree that is something we could consider as an option to try to achieve a solution to the trust issue? How many times has the word "trust" been mentioned here tonight? It is a real issue and I recognise that.
The simple fact is that the farm organisations that were at the talks went back to the picket lines but were not able to bring those picketing with them. The people in the room did their best but they were not able to sell it. They were not able to sell it because the farmers do not see it as stacking up economically for them. Does the Minister recognise it needs further negotiations and further movement?
Lastly, is the Minister concerned about the situation that I outlined regarding the offal industry, where nearly all of it is controlled by one major player because that leads to a most dangerous situation in terms of distorting the market?
I thank Deputy Stanley. On the Deputy's point that participants have been unable to sell the deal and that talks should be reconvened, I do not believe that to be the case. My Department and I have been facilitators of the dialogue on both occasions, in Backweston and, more recently, in Agriculture House last weekend. The fact that seven different farm organisations - the IFA, the Irish Creamery Milk Suppliers Association, ICMSA, the Irish Cattle and Sheep Farmers Association, ICSA, the Irish Natura and Hill Farmers Association, INHFA, the Beef Plan Movement, Macra na Feirme and the Independent Farmers of Ireland - after long negotiations were in a position to put their hand up, state they supported this deal and would recommend it to the picket line is a significant statement of itself that here one has the collective negotiating power of the farming community. Unless we become bound to the last man standing on the picket, this represents the best negotiated way forward. There are obligations on both sides. There is a quid pro quo in terms of the legal proceedings. The way forward is through getting this deal over the line now. I urge people to read it and to give it serious consideration. Time is of the essence. Real, serious irreversible damage is now being done to the industry and I urge everybody involved to consider it.
On Deputy Stanley's Bill, one of the commitments in the agreement is to look at best practice in transparency models internationally. The model which Deputy Stanley has advanced is similar in detail to Part 59 of the US code of regulations but we will look at all models and codes. That is one of the commitments.
That code that he has produced works in a wholesale market in the US. The model in Europe is very different, with third country exports and different circumstances. We look at best practice internationally to see what might be done. Indeed, it is not the case that one operator controls the offal sector here. That is the purpose of having a beef market task force. It will be able to set its own agenda to examine the issues. There is equipment to examine a number of the issues that have been raised as alleged anti-competitive practices in the deal. The task force will be able to investigate and take next steps as it sees appropriate.
I voiced my support during the debate for a policy of taking the meat industry into public ownership. We know the Minister is not going to agree with that. I want to ask him about the Government's policy of providing State assistance to the beef industry in the event of a major crisis flowing from Brexit. Does he believe there would need to be guarantees from the industry on the defence of all jobs before money would be handed over? Is he in favour of handing over the money in the hope that the industry preserves the jobs? Are there conditions attaching such that there would be no wage cuts or job losses in order for money to be handed over? It is not the policy I support; I support taking the industry into public ownership. However, I am asking the Minister a specific question about the Government's policy on handing over that money.
Various ownership models have been at play. The co-operative model has previously applied in the meat industry, although now it is entirely privatised. Perhaps it is an issue for consideration and one that farmers and farm organisations could examine to add further competitive pressures to the market in Ireland. I do not see a role for State ownership but there was previous experience of co-operative ownership in the processing sector and it is something that farmers and their representative organisations might wish to revisit. There are plants allegedly for sale. We are led to believe also some plants may not reopen because of the difficulty. There are opportunities there.
The Deputy made a point about the Brexit supports that may be necessary. The industry needs a functioning meat processing sector. No party to the dispute has any beef with that assertion. The supports that are available are provided through various State agencies. In the context of Brexit, it is widely recognised that the agrifood sector will be the most exposed. The UK market accounts for approximately 300,000 tonnes of our exports or more than 50%, with the figures reducing somewhat this year because of market pressures in the UK, exchange rate issues, etc. We have given a commitment that the required levels of support will be available to keep the agrifood sector in a position to navigate the short or medium-term challenges it may face if there is a crash-out Brexit. The exact detail of that has yet to be worked out in the context of any individual industry.
Why can the beef processing plants not accept less profit? There is talk about €3.40 per kg and I was talking to somebody since I left the Minister who was offered €3.25 a fortnight ago. They cannot survive on €3.25, €3.40 or €3.60; that is a fact. We need €3.80 or €4. That is it. Why can they not accept less profit? A farmer told me one plant made €190 million and asked would €90 million not do it fine for a year. Farmers are making nothing.
I am convinced that a solution can be brought to this crisis by further discussions on many outstanding issues, which I know could take far longer than we might want to consider. There are the issues of 30 months, the control of the offal and many others that these farmers are concerned about. However, to give us any hope of an immediate solution, the Minister needs to put pressure on to raise the base price. If this is done for a period, it could well trigger an end to the protest. Is this possible? We want to bring an end to the protest. Farmers are angered and hurt by comments being made by everybody. We are not going to point any more fingers here. We are just trying to find a solution and a way forward. A serious and fair increase to the base price could trigger an end to this protest.
I refer to the document produced at the weekend, which states that Bord Bia will develop a meat market price index model based on three components: cattle price index, beef market price index, and an offal price indicator, which I think was to start yesterday. The Minister might clarify what that means. It was also stated that there would be an immediate scientific review of the quality payment grid by Teagasc. He might also comment on that, as well as the establishment of a beef meat task force. He might outline what they mean to the farming community.
I have made it abundantly clear, as have all of those who were party to the negotiations, that it is not legally possible to discuss fixing a base price; that is contrary to competition law. One of the leading organisations at the heart of this problem has officially communicated to us that it recognises that base price cannot be part of the negotiations. It has been to the forefront in establishing producer organisations, which it recognises as the vehicle through which talks on base price can be progressed.
Deputy Penrose is dead right in the context of producer organisations. They thrive on the loyalty of those who are members not to be peeled off individually by sweetheart deals. The strength comes in numbers in negotiating specification, in forward pricing, input costs and so on. They can deliver in so many ways for farmers and we have one up and running. It is a credit to those who seized that initiative. They are part of the landscape in most other European countries, where farmers come together. They address the issue that they are price-takers as individuals and group together to negotiate on the basis that "we will provide you with what you want but you must share the risk with us." That is how base prices are addressed and improved. The bonus structure is on top of that. I encourage farmers to take that issue up. I do not know the figures the Deputy is talking about. They sound wide of the mark but I am not going to comment on them. Producer organisations will enable farmers to get a fairer share of the returns.
Deputy Harty asked about the commitment in page 1 of the agreement to the establishment of a beef market price index. This will operate in the same way as Ornua's purchase price index, PPI, for the dairy sector. Its gives an idea of the international benchmark in any given week for the price of the product. Farmers can use that to compare the price being paid here with the average European price. It will probably be based on the top six or seven markets to which we export, including the returns and the volume going into each of those markets. It should also be able to factor in offal prices abroad and indicate what they should be to the primary producer here. It will be another instrument to bring greater transparency to the price model and it is a welcome development. The task force that is being established is to oversee the provisions of the agreement but also, in a number of areas where there is contention or where there are to be further studies, to take on board outcome of the studies and what next steps may be taken.
The taskforce will comprise all the stakeholders. It will be independently chaired. All of this is contingent on getting this deal over the line. There are things that can be delivered immediately and they have been front-loaded in terms of the first page of the agreement. There are other issues where there is a difference of opinion and there are commitments to have those matters investigated. I refer to alleged anti-competitiveness practices, greater price transparency, directors and a regulator for the sector. They are all things the taskforce will oversee and drive and it will set its own agenda because the agenda will change as well. That is what the taskforce is about.
The review of the grid is a source of contention. The grid is not the property or the invention of the Department. It is a formula for paying that was negotiated between the processors and farm organisations some years ago and it is overdue a review.
It should never have been brought in.
The commitment from the parties that own it is to ask the State agency, Teagasc, to carry out the review with a view to seeing how it might be changed into the future.
I think I have addressed all of the questions that have been raised. I believe this deal represents the best way forward and I hope that given the fact that it has been endorsed by everybody in the room who negotiated it, it is incumbent on all of us to try to drive that agenda forward.
I have four short questions, which I will put together for the Minister. The first is a question on protected geographical indication, PGI. Does the Minister have any update for the House on whether there are any discussions with the European Commission or with the authorities? What is his projected timeline? Does he think it would be applied to a certain category of beef farmers or to all?
The second question relates to the land use plan. We had a discussion on the issue during Question Time with the Minister. Everyone I meet on the academic and policy side says that it is correct to say that we need a land use plan, such is the scale and complexity of the challenge and the interaction between environmental objectives, social objectives and economic objectives that one cannot map where we are going from here unless we have a proper land use plan.
Third, the Minister opened up the organic scheme but I understand it was closed again. Could he give an indication of the demand from beef farmers for entry into the scheme? Does it provide a path for the future, as the farmers in Austria seem to have mastered, whereby they get a high price for a significant percentage of organic dairy and beef produce?
Last but not least, I did not raise it in my speech but in the context of base prices and commodity markets, does the Department have any analysis of the development of artificial beef, in other words, hamburgers made in a lab? The Minister is smiling but from what I am told people say this is game over for the beef industry anyway because of that potential development. I do not know if there is any awareness or recognition that it is coming, pretty much with certainty. If we are not aware of that as a potential input to the debate on the price of beef then we are missing a trick.
On the latter point, the pace of scientific advance is quite staggering in that area. One of the great strengths of our offering on the international stage is the natural product that we produce in a sustainable way in a grass-based production system. While we must be cognisant of all consumer trends and scientific advances, I do not think we should in any way dilute the merit of the offering we have. It is a ferociously competitive market out there.
In the context of Deputy Ryan’s other question on the PGI status, there is ongoing engagement between my Department and the Commission on having PGI approval for the grass-based, suckler offering we make in the beef sector. We are trying to progress that as quickly as possible at a European Union level to give us a niche branded offering, because we must move away from the bargain-basement commodity in terms of beef production. That is what everything we have been doing for many years has been driven by in terms of producing beef to a higher specification and, as the Deputy said, not disrespecting the consumer but responding to consumer trends. Looking for a grass-based, natural, Origin Green product is a critical part of our offering. That is based on the feedback and analysis that has been done by Bord Bia, which does a tremendous, professional job. It is highly regrettable that Bord Bia has been targeted in a most unfair way for abuse and criticism, in particular today at the ploughing championships. Bord Bia does a tremendous job all over the world promoting and working with Irish farmers and the processing sector to advance the best interests of all of us.
In terms of a land-use plan, I am not in favour of a prescriptive approach that says there should be trees in the west, dairy production in the Golden Vale and tillage in the south east. Every area has an obligation to carry its share of the responsibility in terms of efficient production and maximum sequestration. I do not think it is fair to ask something of a particular sector of society or to say to a geographic area of the country that this is the only place for trees. That has bedevilled the afforestation programme-----
That is not what a land use plan does.
It is a prescriptive approach that tells people the type of activities they should do because of the type of land they have. I do not believe the buy-in that we require in terms of the challenging obligations we have set for ourselves in the context of climate would be advanced by that kind of prescriptive approach.
I will ask the Minister of State, Deputy Doyle, to respond to the question on the organic scheme because he is more au fait with the detail of it, but it has been successful and works for those that are involved in it.
Could I take it that that concludes the question and answer section and that, in conformity with the order of the House, a Minister or Minister of State has ten minutes to respond to the debate? Does the Minister, Deputy Creed, wish the Minister of State, Deputy Doyle, to respond to the question and then the Minister will conclude the debate?
The Minister of State, Deputy Doyle, will respond to Deputy Eamon Ryan's question and then the Minister, Deputy Creed, will have ten minutes to conclude the debate.
The organic scheme was re-opened in consultation with the organic strategy implementation group. It was identified that there was scope for expansion in the dairy and arable sectors. The organic scheme for beef was well subscribed but there was a deficit in organic grains for supplementary feed to finish animals. The feed was too expensive which meant that some beef and only 32% of lamb born to organic standards was being sold as organic because it was not economically viable. There was also great demand for milk products and by-products from the Little Milk Company, Glenisk and others. The scheme was weighted in favour of the dairy and arable tillage sectors specifically at the request of the focus group. We implemented its recommendations and we re-opened the scheme. There will be a review of the scheme post 2020. When my predecessor, Trevor Sargent, a former colleague of Deputy Eamon Ryan, was in the Department 12 years ago he set a goal to drive forward organic production, which was at 1%. We are now at 2% and growing, so the scheme has worked and is working and it has potential.
Austria has about 40% organic production.
Yes, but it is a different model.
I thank all Members for their constructive engagement on what is the most difficult, protracted, long-running and challenging issue that has arisen in the agricultural agenda for a long time. I thank not alone those who spoke but all Oireachtas Members of my party, all parties and none with whom I engaged intensively in the past several weeks in an effort to make progress on the issue. I appreciate the bona fides, wisdom and assistance that was freely given and the advice that was offered. I like to think the agreement we reached was informed by that spirit of co-operation and generosity. There is a recognition that this is an issue that is above party politics, which has polarised the farming community, and there is a requirement to find a solution to it.
To those who have been involved in the pickets, I say that they have made their point. They have probably made it more forcibly than anybody in my memory has made a point about how disaffected, alienated, excluded and disappointed they feel.
There comes a time, however, when protest has to end and we have to resume normal business. I believe it is the distilled view of most Members of this House that we would earnestly appeal to them on that basis to say the time has come to stop. They have made their point. They have made it eloquently and passionately, and I know they are invested emotionally in the cause they have given so much to over recent weeks.
I fear we have reached a tipping point in this protest, where its continuation now serves to do irreparable and irreversible damage to the industry that we all profess to want to serve. We live by our reputation in the international market. We have a good reputation and it has been enhanced by those farmers and the quality of the product they produce. It has been enhanced by those like Bord Bia which, on the international stage, is as good as any body I have seen and probably the best at what it does in terms of the global reach and the professionalism it brings to giving us a reputation in those international markets, which many would seek to displace us from. The international marketplace is very competitive, and it is particularly so in beef because it is oversupplied. In the markets we are predominantly reliant on, we are looking at consumption that is flatlining and consumption patterns that are changing, as Deputy Ryan alluded to. The newer markets, where there is potential, are probably not yet as financially rewarding as the more mature markets we are in. As I said, we are now at a stage where our reputation is in some jeopardy and others are only watching to take our market share. I appeal to those who have made their protest eloquently to consider that the time to stop is now.
It is indicative and worth reflecting on that seven farm organisations of different hue, view, motivation, background and membership came together and collectively, in very intensive negotiations, reached a conclusion. It takes some bravery to negotiate and to acknowledge that one cannot get in negotiations everything one wants, and to compromise. It is significant that seven organisations that came to the table approved the deal that was concluded. I acknowledge the nuanced approach of the Independent Farmers of Ireland and that, on the day, they said they would have difficulty with it. However, all seven did put their hands up to commit to sell this deal to the farmers on the picket line. It is worth reflecting on the significance of that alone because, as all of us collectively know, they are not easily pushed over. Farm organisations are probably among the most effective lobbyists and campaigners. When they recognise that what is on the table is the best that is on offer now, but that there is also within the agreement a roadmap to address other issues of contention, that is worth reflecting on.
One of the very positive things that has come out of all this, and I think it will be a lasting legacy, is producer organisations. We have been on a roadshow around the country for more than two years and have approved various facilitators, but I take my hat off to the people who seized the opportunity and who now recognise that the way to progress the partnership that should be at the heart of this industry is through producer organisations. I would say to farmers to seize the opportunity. There is plenty of room for more than one producer organisation. When people control significant numbers of cattle through a producer organisation, they have leverage in those negotiations, they can negotiate price and specification, and they can share risk and plan with greater certainty. I acknowledge the endeavours of those who took the initiative to establish it and, indeed, to the officials in my Department who have been recognised by the producer organisations as having been very helpful.
While I acknowledge all of the people who contributed and their bona fides, this is the critical time. Collectively, I believe it is time to call a halt to the protests. I appeal to them. I have had engagement personally with protesters from west Clare, west Cork, Kildare and the south east, and I have met them in Carlow, as well as through the engagement with all of my Oireachtas colleagues and others on all sides. While I do not want to mention names, some were especially helpful and insightful, and a bridgehead to the picket lines. All of us in the House have a good understanding of the issues. I believe the deal represents the best way forward to deal with those.